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Contents
The United Arab Emirates Banking Sector..................................................................2
ANALYSES OF UAE BANKING SECTOR.........................................................................3
Central Bank of the United Arab Emirates.........................................................................4
Economy of the United Arab Emirates.............................................................................. 6
Top 5 The United Arab Emirates Rich List..........................................................................7

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The United Arab Emirates Banking Sector

The UAE has a fragmented banking sector. A total of 46 domestic and foreign banks are
operating inthe UAE. The banking sector is somewhat protected; however, foreign banks are
becoming increasingly active in the economy. The banking sector is gearing up to meet global
challenges by adopting Basel II banking standards. The big five banks dominate the banking
sector and all of thelarge ten banks are financially sound. The banking sector is well managed
by the UAE Central Bank which is a positive factor for the countrys growth and globalization
efforts because the UAE banking sector has grown drastically and is gearing up for global
competition.

Introduction
The United Arab Emirates (UAE) is a federation of seven small American Gulf emirates: Abu
Dhabi, Dubai, Sharjah, Ajman, Umm Al Qaiwain, Ras Al Khaimah and Fujairah. UAE is a
member of the Gulf Cooperation Council (GCC), and the country is traditionally an oil and gas
exporting nation. Currenlty, each of the emirates has a relatively stable economic and political
system, and the country has an ambition to emerge as a financial and service sector leader in the
Middle East. UAE has proven crude oil reserves of around 98 billion barrels (or 10% of the
worlds reserves). The oil wealth is concentrated in Abu Dhabi, which contributes approximately
90% of the total oil production of the country. UAE also boasts substantial reserves of natural
gas, accounting for 4% of the worlds reserves. The bulk of gas reserves (over 90%) are located
in Abu Dhabi as well. The emirate of Dubai has also become an important financial center in the
UAE because of its significant financial and services industries. Abu Dhabi and Dubai have
emerged as the two most important emirates of the UAE.

UAE Banking Sector

Market access for foreign banks was somewhat limited because they were not allowed to open
more than eight branches throughout the modern banking operation (1980-2003). In 2003,
however, laws were changed, and today banks are allowed to open more than eight branches but
special permission is required. Foreign banks confronted no obstacles, however, when they
wanted to open a representative office. At the end of 2004, there were thirty-six representative
offices throughout the emirates. Thus, UAE has been well represented by a cross-section of
foreign banks.
Federal Law 10, enacted in 1980, is the backbone of the conventional banking sector (excluding
Islamic banks), and Federal Law 6 was promulgated in 1985 to legalize Islamic banking in the
UAE.Under the Federal Law 10, the Central Bank of the UAE was also established, and it took
over the responsibilities of the Currency Board. The bank's duties include advising the
government on monetary and financial issues, issuing currency, maintaining gold and foreign
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currency reserves, and formulating a credit policy. All regulation and supervisory duties are
under the direction of the Central Bank.

ANALYSES OF UAE BANKING SECTOR

UAE banks, along with Saudi Arabian and Kuwaiti banks, have dominated the GCC and Middle
Eastern banking sector. Because of the number of banks in the UAE, the countrys banks are
rated ninth, tenth, fourteenth, fifteenth, eighteenth, twenty-eighth, fortieth, forty-first, fortyeighth, and fifty-fifth among the top Middle East banks. This ranking is based on the tier-one
shareholders equity as defined by Bank of International Settlement (BIS). A list of top ten
conventional and Islamic banks with their rank among the top hundred Middle Eastern banks,
capital, assets, profits, ROE and ROA are presented in Table 1.
The most noticing observation is that all banks were profitable in 2004. The UAE Central Bank
required banks to maintain a 10 % capital / assets ratio and most of the banks exceeded the
requirement. In fact, only three banks (NBAD, UNB, and CBD) had slightly lower capital /
assets ratios, and even these banks were very close to the 10 percent mark. The research also
reveals that ROE and ROA were much higher in conventional banks than Islamic banks. The
highest ROE in 2004 was reported by the Union National Bank (20.3 %), while the highest ROA
was reported by the Commercial Bank of Dubai (3.3 %). The top UAE bank based on capital was
the Emirates Bank International, and the top UAE bank based on assets was the National Bank of
Abu Dhabi

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Central Bank of the United Arab Emirates

The Central Bank of the United Arab Emirates (Arabic: ) is the
state institution responsible for managing the currency, monetary policy and banking regulation in
the United Arab Emirates (UAE).
It was established on 19 May 1973 as the United Arab Emirates Currency Board. This followed the
creation of the UAE as an independent state in 1971. The original purpose of the UAE Currency
Board was to issue an independent currency for the new state to replace the existing currencies in
use: the Qatari riyal and the Bahraini Dinar. The new UAE dirham entered circulation on the same
day the Currency Board was established.
The Central Bank of the UAE has powers to issue and manage the currency; to ensure the stability
of the currency; to manage the UAE's credit policy; to develop and oversee the banking system in
the UAE; to act as the Government's banker; to provide monetary and financial support to the
Government; to manage the UAE's gold and currency reserves; to act as the lender of last resort to
banks operating in the UAE; and to represent the UAE in international institutions such as
the International Monetary Fund, the World Bank and the Arab Monetary Fund.

Organization and functions:

Branches
In addition to its Head Office in Abu Dhabi, the Bank has
branches in five other cities in the UAE. These are:

Al Ain

Dubai

Fujairah

Ras Al Khaimah

Sharjah

Bord of directors
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The Bank is overseen by a Board of Directors, comprising seven members. The composition of the
Board is defined by the UAE Union Law No 10 (1980) which provides for a Chairman, Vice Chairman
and the Governor (all of whom have the rank of Minister) and four other members. Each member is
appointed by a Union Decree after approval by the UAE Council of Ministers, and serves for four
years. Members of the Board are prohibited from serving on the board of any commercial bank
operating in the UAE, nor may they be serving members of the UAE Federal National Council or be
Ministers of Cabinet status.

Banking Operations Department

This department is responsible for regulatory
oversight of the banking industry in the UAE. A
significant part of the department is located in the
Bank's Dubai office, since the banking industry in
the UAE is largely concentrated in this city. The
scope of its regulatory mandate includes
domestic banks, foreign banks located in the
UAE as well as finance house and other financial
institutions, including financial advisory practices.
In June 2013, there were 23 domestic banks and 28 foreign banks in the UAE.

Economy of the United Arab Emirates

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The economy of the United Arab Emirates is the second largest in the Arab world (after Saudi
Arabia), with a gross domestic product (GDP) of $570 billion (AED2.1 trillion) in 2014. The United
Arab Emirates has been successfully diversifying its economy. 71% of UAE's total GDP comes from
non-oil sectors.
Although UAE has the most diversified economy in the GCC, the UAE's economy remains extremely
reliant on oil. With the exception of Dubai, most of the UAE is dependent on oil
revenues. Petroleum and natural gas continue to play a central role in the economy, especially
in Abu Dhabi. More than 85% of the UAE's economy was based on the oil exports in 2009. [11][12] While
Abu Dhabi and other UAE emirates have remained relatively conservative in their approach to
diversification, Dubai, which has far smaller oil reserves, was bolder in its diversification policy.[13] In
2011, oil exports accounted for 77% of the UAE's state budget
Prior to independence from the UK and unification in 1971, each emirate was responsible for its own
economy. At the time, pearl diving, seafaring and fishing were together the mainstay of the economy,
until the development of Japanese cultured pearls and the discovery of commercial quantities of oil.
[19]
Previous UAE President Sheikh Zayed Bin Sultan Al Nahyan is credited with bringing the country
forward into the 20th century and using the revenue from oil exports to fund all the necessary
development. Likewise, former UAE vice-president Sheikh Rashid Bin Saeed Al Maktoum had a bold
vision for the Emirate of Dubai and foresaw the future in not petroleum alone, but also other
industries

External Trade
With imports totaling $273.5 billion in 2012, UAE passed Saudi Arabia as the largest consumer
market in the region. Exports totaled $314 billion, which makes UAE the second largest exporter in
the region.[18]

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UAE and India are each other's main trading partners, with the latter having many of its citizens
working and living in the former. The trade totals over $75 billion (AED275.25 billion). [21]
The UAE also has significant economic ties with the USA, UK and other European

Investment
The stock market capitalisation of listed companies in the UAE was valued at $109.9 billion in
October 2012 by Bloomberg.

Top 5 The United Arab

Emirates Rich List
1. Sheikh Khalifa bin Zayed al-Nahayan $15-$23billion. 65-year old Sheikh

Khalifa al-Nahayan is the richest person in UAE- and, fittingly, the

President. Sheikh Khalifa has an estimated net worth of between $15$23 billion.
2.

Sheikh Mohammed bin Rashid al Maktoum $18 billion

The first of two major political players on our list, Sheikh Mohammed
bin Rashid al Maktoum is the Prime Minister and the Vice President of
the UAE. He has an extraordinary 23 children with whom to share his
fortune.

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3.

Majid Al Futtaim, $3.6 billion. Majid Al

Futtaim has a net worth of about

$3.6 billion. While quite a bit of this
wealth comes from an inheritance, his
other sources of wealth include retail
and commercial real estate properties.
The billionaire is the estranged
brother to business mogul Abdulla Al Futtaim
4. Abdulla bin Ahmad Al Ghurair, $3.1 billion.
5. Abdul Aziz Al Ghurair, $2.9 billion. He was born on 2nd November 1954 in
the UAE. The billionaire attended California State Polytechnic
University and is married with 5 children. 59-year old Al Ghurair is the
Chief Executive Officer of Mashreq, a leading commercial bank in the
UAE. Mashreq bank was founded in the 1960s by Abduls father,
Abdulla bin Ahmad Al Ghurair, when the UAE was experiencing a rapid
economic growth fuelled by the discovery of vast oil reserves.

One of the places where you can enrich are the AUE. Established in December 1971, the
country is a federation of seven emirates. This country is the dream of millions of people
around the world.Although being a relatively young country it came to be among the
strongest economies in the world. Economic political and social performance registered in
this country ensures it a productive development on future years.