Improving Banking Supervisory Mechanisms
In the OIC Member Countries
94
Figure 60: Securities Decomposition, United Arab Emirates
Source: Bankscope
UAE's securities are also mainly in the form of “available for sale (AFS)” rather than held to
maturity. Trading book of this security portfolio is relatively small which also justifies why
marginal level of market risk. Loan to deposit ratio by the Central Bank of the UAE is around
80% in 2013. This ratio is not extremely high compared to many banking sector which have
experienced significant banking crisis.
Figure 61: Liability Decomposition, United Arab Emirates
Source: Bankscope
UAE loan distribution also exhibits a similar pattern to other selected OIC member states. Bank
scope data classifies 39% of its loans as other loans.
As a conclusion, our analysis indicates that there is no major banking risk observed from
macro-level banking data. However, as an oil exporting economy, UAE may face some macro
risks due to decreasing oil prices. Besides, decreasing global liquidity or increasing in the
global interest rates can also create some difficulties for the functioning of the banking system.
Trading Sec. & at
FV
through Income
6%
Available for
Sale Securities
68%
Held to
Maturity
Securities
26%
Securities Decomposition
Total
Customer
Deposits
79%
Deposits from
Banks
7%
Total Equity
14%
Liability Decomposition