Bank balances across the country grew by more than Dh28.1 billion (US$7.65bn) in the past two months in a spike analysts believe could be due to a trickle down of financial support for the heavily indebted Dubai World conglomerate.
Deposits grew at their fastest in eight months, increasing by Dh13.5bn to reach Dh998.9bn last month from June, data released by the Central Bank yesterday showed.
"One possibility is that this increase is related to the bailout of Nakheel and funding of the Dubai Financial Support Fund," said Raj Madha, the senior banking analyst at Rasmala Investments in Dubai.
"We were expecting Nakheel to get funding in the second quarter and it is likely this would have come from the Central Bank sources transferred from outside the financial system."
The absence of strong loan growth to support the rise in deposits further reinforced the suggestion that the money was from an injection of government cash, he said.
A property market slowdown in Dubai linked to the global credit crunch prompted a series of Government assistance packages to help the repayment of debts owed by the troubled conglomerate Dubai World, including its property unit Nakheel.
Local and international banks have suffered from their exposure to the financial crisis.
The Dubai Government offered $8bn of new funds in March to assist Nakheel in repaying its creditors. Nakheel has since agreed on terms with its main lenders.
Nakheel said yesterday it had repaid about Dh2.5bn owed to creditors last month.
Dubai borrowed $10bn from Abu Dhabi in December after receiving another $10bn in February last year from the Central Bank to boost liquidity in the emirate.
Specific provisions for non-performing loans and general provisions combined rose by Dh1.4bn last month from June, according to the Central Bank data.
"It could be that the smaller banks did not provision well in the second quarter and are playing catch-up in the third quarter," said Mr Madha.
Other data from the Central Bank showed M1 money supply, the narrowest measure of money in the financial system, eased to an annual 5.3 per cent growth rate last month from 6.3 per cent in June.
M2 money supply, which includes time and savings deposits, grew 5.2 per cent last month after 5.4 per cent growth in June.
M3 money growth, the widest money supply gauge, slowed to 2 per cent last month from 2.1 per cent in June.
tarnold@thenational.ae
PREMIER LEAGUE TABLE
1 Man City 26 20 3 3 63 17 63
2 Liverpool 25 17 6 2 64 20 57
3 Chelsea 25 14 8 3 49 18 50
4 Man Utd 26 13 7 6 44 34 46
----------------------------------------
5 West Ham 26 12 6 8 45 34 42
----------------------------------------
6 Arsenal 23 13 3 7 36 26 42
7 Wolves 24 12 4 8 23 18 40
8 Tottenham 23 12 4 8 31 31 39
What is 'Soft Power'?
Soft power was first mentioned in 1990 by former US Defence Secretary Joseph Nye.
He believed that there were alternative ways of cultivating support from other countries, instead of achieving goals using military strength.
Soft power is, at its root, the ability to convince other states to do what you want without force.
This is traditionally achieved by proving that you share morals and values.
Killing of Qassem Suleimani
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
