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Banking and Finance in Dubai
Dubai is leading the way in the Middle East in attracting international investment banks wanting to establish a presence in the region. In the early 2006, there were 46 active banks in UAE, 21 national banks and 25 foreign banks and their branches increased to 449 and 115 respectively.UAE Banks’ profits increased at exceptional speed with 8 local banks, breaking the AED 1 billion level. Additionally, 2 of these banks went on to crack the AED 2 billion mark – National Bank of Abu Dhabi with AED 2.58 billion and Mashreq Bank with AED 2.01 billion.Banker across Asia claim that the emergence of Dubai as a financial center with global linkages has helped improve the comfort level among the bankers and fund managers seeking to build bridges with the oil rich Middle East.According to The Banker Magazine,’ Combining cash with the search for new investment opportunities, many affluent investors are positioning themselves to use Dubai as an increasingly important point of origin – a base from which to establish new links with eastern Asia’.The total assets of banks operating in the UAE, according to the syndicated budget of banks, rose from AED 449.7 billion by the end of 2004 to AED 638 billion by the end of 2005, up by 42%.The assets of national banks rose from AED 344.1 billion to AED 499.1 billion ($ 136 billion), up by 45% while the credit facilities provided by the banks to the customers rose from AED 190.7 billion to AED 280.6 billion and local investment from AED 7.9 billion to AED 16.9 billion.The assets of foreign banks increased from AED 105.7 billion by the end 2004 to AED 138.9 ($37.8 billion) billion by the end of 2005, up by 31.4% while the credit facilities provided by these bank to their customers rose from AED 56.3 billion to AED 72.5 billion and their local investment from AED 2.1 billion to AED 2.22 billion.Dubai is considered the hub of the insurance industry in the UAE. It hosts 49% of the total number of insurance companies, followed by Abu Dhabi with 33% and Sharjah with 10.4%.One of the insurance industry’s biggest revenue providers is logistics, due to its highly diverse requirements including the shipment of goods, storage and warehousing of commodities and perishables, fire and flooding building insurance and staff medical policies.The financial year 2005 was a year of success for Dubai National Insurance and Reinsurance Company with an achievement of net profits from AED 80.40 million in 2004 to AED 305.76 million, an increase of 280%.22 insurance companies listed in the local financial markets scored net profits of AED 3.5 billion ($953 million) during 2005, while the shareholders’ rights increased to AED 12 billion ($ 3.27 billion).|
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