Page 364 - Ministry of Economy - December 2017

12/25/2017 Union National Bank is a pillar of the United Arab Emirates economy | World Finance
The financial services sector is an important part of 6. Why Barwa Bank
the UAE economy, one that helps much of the are leaders in Islamic
region’s growth. In 2016, according to the Ministry of banking
Economy, this industry contributed 9.8 percent of
GDP and 12.8 percent of non-oil sector domestic 7. MENACORP:
product. capitalising on the
UAE’s strengths
The UAE’s banks are particularly influential in the 8. Wealth on the
sector’s overall performance, with commercial horizon
institutions playing a pivotal role. Indeed, loans from
commercial banks are responsible for nearly 90
percent of total lending in the financial sector.

Last year was not easy for the financial industry as the
UAE was hit by new and challenging market realities.
These included low oil prices, China’s economic
slowdown and regional conflicts – the latter of which
has weighed heavily on local and international
indices.

In recent times, such issues have plagued much of the
world, but concerns in the UAE were all the more
prevalent considering that its economic growth has
been on a persistent downturn since 2015.

Fortunately, the sector has proved to be well
equipped to deal with conditions of every kind. As a
result, forecasts are now increasingly optimistic, and
many expect the region to bounce back by 2018.

In a recent IMF note, the institution predicted that
the growth of the UAE’s non-oil sector will rise to 3.3
percent in 2017 from 2.7 percent in the previous year,
reflecting increased domestic public investment, as
well as a pick-up in global trade.

Resilience in times of pressure
In spite of enormous margin pressures, increased
impairment pressures and higher funding costs, banks
in the UAE have remained immensely resilient. The
UAE’s banking sector is expected to experience a
slight pick-up in lending growth in 2017, given
higher oil prices and an anticipated loan growth of
seven percent, compared with six percent in 2016.

Union National Bank (UNB) is one of the most stable
banks in the UAE, a fact that is reflected in its
consistently strong ratings and performance.

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