17
ANNUAL REPORT 2015
BANKING & MONETARY DEVELOPMENTS
loan concentration limits. This would also
provide adequate instruments for liquidity
management under the recently issued Basel
III liquidity rules.
A continued strengthening of GREs’
balance sheets and active management of
their upcoming debt repayments, while raising
risk-weights of bank lending to GREs if needed,
will become important in reducing macro-
financial vulnerabilities.
A liquidity stress test carried out by the
Central Bank using Liquidity Coverage Ratio
(LCR) methodology suggest that most banks
pass the minimum 100 per cent LCR even
under the adverse scenario. Thus the phase-
in introduction of the LCR with a 60 per cent
requirement in 2015 provides banks with
a schedule to adjust to the 100 per cent
requirement by 2019.
Banks and Branches
Banks in the UAE improved customer reach in
2015 with an increase in branches from 869
at the end of 2014 to 874 at the end of 2015,
while the number of locally incorporated banks
stayed the same at 23. Furthermore, there was
an increase in electronic banking service units
from 34 at the end of 2014 to 37 in 2015. This
is a significant upward trend from 29 at the
end of year 2013. The number of cash offices
has remained unchanged at 90.
This increase in physical presence together
with a continued commitment to provide
online and mobile solutions that are available
24/7 demonstrates UAE banks’ commitment
to serve at consumer level, being accessible
to their customer base and delivering on
best possible customer service. While the
increasing use of digital transactions is
inevitable, demand for branch banking
remains strong and the UAE banking sector
is steadfast in its commitment to provide a
physical presence, foster relationships and
interact with customers.
The number of GCC banks present in the
UAE held steady at six with four branches. The
number of foreign banks with main branches
in the UAE was also unchanged at 20 with 82
branches. However, the number of electronic
services units of these banks decreased from
48 in 2014 to 40 in 2015.
Other institutions licensed by the
Central Bank – finance companies, financial
investment companies and offices for
intermediation in currency trading and money
market operations – remained the same at 26,
25 and 12 respectively. However the number
of wholesale banks and money changers rose
from seven to eight and from 140 to 143
respectively. The number of representative
offices decreased from 121 to 115.
The total of ATMS of banks operating in
UAE reached 5,119, up from 4,847 in 2014.
Outlook and Prospects
A study based on banks’ 2015 annual results by
the Boston Consulting Group (BCG) suggests
