RIYADH: Islamic banks in the UAE have seen the value of their assets reach 703 billion dirhams ($191.4 billion) by the end of 2023, an annual increase of 11%, according to official data.
Figures released by the UAE Central Bank reveal that this is a jump from Dh630.7 billion in December 2022, representing a growth of Dh72.4 billion year-on-year.
Month-on-month, assets increased by 0.6% in December, totaling 4.2 billion dirhams compared to 698.8 billion dirhams in November.
Islamic banks follow Sharia principles, providing various financial services including investments and deposits, avoiding interest-based transactions and adhering to ethical standards.
CBUAE has issued licenses to several full-fledged Islamic banks, including Abu Dhabi Islamic Bank, Ajman Bank and Al Hilal Bank.
In addition, BOK International Bank, Dubai Islamic Bank, Emirates Islamic Bank and Sharjah Islamic Bank have also received licenses to operate in this sector.
According to CBUAE data, credits granted by Islamic banks amounted to 428.9 billion dirhams in December, an annual increase of 7.82% compared to 397.8 billion dirhams.
Furthermore, deposits with these institutions experienced a sharp increase, reaching 495.3 billion dirhams at the end of 2023, reflecting annual growth of around 12.6% compared to 439.8 billion dirhams in December 2022.
On a monthly basis, deposits increased by 0.9% compared to 491.1 billion dirhams in November 2023.
These banks saw their total investments reach 132.7 billion dirhams in the month of December, an annual increase of 27.1%, or 28.3 billion dirhams, while monthly investments increased by around 1%.
The distribution of these investments includes 100.4 billion dirhams of bonds held until maturity, 18.7 billion dirhams of financial instruments representing claims on others and 2.6 billion dirhams of shares. This also includes 11 billion dirhams of other portfolio investments.
In comparison, traditional banks operating in the UAE have seen substantial growth in their total assets, reaching Dh3.3 trillion at the end of last year. This is an annual increase of 11% compared to 3,000 billion dirhams, reflecting an increase of 335.2 billion dirhams over the year.
As of December, conventional banks accounted for about 82.7 percent of the country’s banking system’s total assets, totaling Dh4 trillion, while Islamic banks held a 17.3 percent share.
At the same time, conventional banks granted total credit of 1,500 billion dirhams until December, an annual increase of 5.5%, while deposits jumped to 2,000 billion dirhams.
Total investments by conventional banks increased by 15.6% per year to reach 488.8 billion dirhams in December. This includes 246.2 billion dirhams of financial instruments representing claims on others, 204.4 billion dirhams of bonds held to maturity, 13.2 billion dirhams of shares and 37.9 billion dirhams other investments.
