Dubai Career Diary

The Central Bank of the UAE has released its 2023 Annual Report, providing an analysis of financial and economic developments domestically, regionally, and globally, as well as detailing the CBUAE’s actions, strategic developments, and progress delivered during 2023.

The report states that the United Arab Emirates’ real GDP growth stood at 3.6% in 2023. For 2024, the CBUAE projects real overall output growth rebounding to 3.9%, primarily on the back of a recovery across diverse sectors of the economy.

The UAE’s financial sector also recorded robust performance in 2023, achieving 11.1% growth in total assets to over AED4tn ($1.1tn). The country’s banking system also maintained appropriate capitalization, strong profitability, and sufficient liquidity for the year.

The Central Bank also marked significant progress against its 2023-2026 Strategy in the areas of financial stability, monetary policy, banking, insurance, and financial crime supervision, consumer protection, and digitization.

Testament to these efforts is the United Arab Emirates’ banking system’s improvement across key bank soundness indicators. The results are based on the CBUAE’s internal comparison methodology, which leverages data from IMF Financial Soundness Indicators.

With regards to financial stability, the CBUAE actively employed a macroprudential policy framework to safeguard financial stability, while continuing to perform stress tests to assess banks’ capital and liquidity buffers against adverse scenarios.

The CBUAE also continued its work to ensure the safety and soundness of the financial sector in 2023, carrying out 247 prudential examinations – up from 181 in 2022.

For the first time, climate-related risks formed part of the CBUAE’s work in enhancing the regulatory and supervisory framework for licensed financial institutions (LFIs).

In addition, the CBUAE’s enhanced efforts in the area of financial crime supervision contributed to the completion of the action plan agreed with the Financial Action Task Force (FATF) and the United Arab Emirates’ exit from FATF’s enhanced monitoring process.

As part of its Financial Infrastructure Transformation (FIT) programme, the Central Bank launched a series of innovative payment platforms in 2023 with the aim of driving the transformation of the UAE’s financial sector and strengthening its stature as a global digital payments hub.

These include the establishment of an Instant Payments Platform, Aani, as well as the country’s first domestic card scheme, Jaywan.

Building on its commitment towards consumer protection, the Central Bank issued the Ombudsman Regulation in 2023. This led to the establishment of Sanadak, the first independent financial ombudsman unit in the MENA region with a mandate to receive and handle complaints from consumers of banking and insurance institutions.

The Central Bank also continued to promote Emiratisation across the financial sector, with a total of 2,720 Emirati nationals joining the sector in 2023 against a target of 1,875.

Emiratisation in leading roles in Banks sector also reached 31% – an 8% year-on-year increase.

In keeping with its commitment to bolster sustainability, the Central Bank launched the COP28 TechSprint to promote technology innovation in scaling sustainable finance.

The initiative attracted a record 126 proposals from 31 countries. Furthermore, the Central Bank played an important role in uniting the UAE banking sector to mobilise AED1tn ($272bn) in sustainable finance by 2030.

Khaled Mohamed Balama, Governor of the Central Bank, said: “Guided by the ambitions of our leadership, the CBUAE remains steadfast in its efforts to safeguard financial stability, promote trust in the UAE’s financial system and enable its digital transformation, and improve the nation’s competitiveness globally.