UAE’s Thriving Banking and Financial Sector Continues to Grow in 2024

The UAE's banking and financial sector grew by 11.1% in the last year, according to The Central Bank of the UAE, and is forecast for continued growth and recovery in 2024. In Naukrigulf’s 2023 year end report, we saw that banking and finance was a trending sector in the previous year and is likely to continue in 2024. This upward trend is fueled by the diversification of the UAE economy along with potential areas of future development.

The Central Bank of the UAE (CBUAE) is credited with playing a key role in fostering this growth. Their successful strategies and policies focus on creating a robust regulatory framework that promotes financial stability and sustainable development within the banking sector with the following:

• Establishing clear and effective regulations that ensure the smooth functioning of the banking system while mitigating risks. This fosters trust among investors and depositors.
• Implementing measures to maintain strong capital adequacy ratios for banks, ensuring they have sufficient reserves to withstand economic fluctuations ensure financial stability.
• The CBUAE has also provided initiatives that promote long-term economic growth and responsible banking practices that contribute to the UAE's overall development goals.

 

Banks in the UAE are demonstrating strong financial health. A key indicator is their capital adequacy ratio, which reflects their ability to absorb potential losses. As of Q4 2023, this ratio stood at a healthy 17.9%, exceeding the minimum requirement set by the CBUAE (13% under Basel III guidelines). This is further supported by data from MEA Finance, which shows a 5.2% increase in capital and reserves of UAE banks in Q4 2023.

 

The following points are some indicators of strong performance:

• Total bank assets have grown 11.1% YoY. This reflects the overall expansion of the banking sector.
• Deposits from residents and non-residents have grown 13.5% YoY. This indicates growing public trust in the banking system and potentially increased investment activity.
• Small and medium-sized enterprises (SMEs) are a vital part of the UAE's economy. Banks are likely to prioritize providing them with easier access to financing and financial services tailored to their needs.

 

Potential areas of growth for the UAE banking and financial sector in the coming year would improve with the implementation of financial technologies. FinTech integrations in areas such as mobile banking and digital payments could streamline processes for the consumers. Artificial intelligence has been introduced for fraud detection and credit risk assessment. Additionally, blockchain technology helps with more secure and transparent internet transactions.

The thriving banking and financial sector translates to a booming job market. Roles in demand include those specializing in FinTech, digital banking, wealth management, and risk management. The UAE's banking and financial sector is not just growing, it's thriving. With a solid regulatory framework, strong financial health, and a focus on innovation, the future looks bright for this vital sector.

 

If you would like to apply for jobs in the UAE within the banking and finance sector, click here.