UAE credit expansion, deposits up

UAE banks sanctioned slightly more loans and advances to credit-hungry customers in the first five months of the year, while deposits showed a growth of 5.2 per cent in the period, latest data published by UAE Central Bank showed. Lending in the January-to-May period rose 0.3 per cent year-on-year, the data said. Total bank deposits dropped 1.2 per cent month-to-month during May 2012 to close at Dh1.125 trillion. Loans and advances showed a slight improvement, growing 0.2 per cent to Dh1.074 trillion. However, bank assets shrunk 0.9 per cent month-to-month to Dh1.7258 trillion in May. Money supply M0, comprised of currency in circulation and currency at banks, rose 0.4 per cent from Dh53.6 billion in April to Dh53.8 billion at the end of May. Money supply aggregate M1, comprised of currency in circulation and monetary deposits, dropped by 1.5 per cent, from Dh286.1 billion at the end of April 2012 to Dh281.7 billion at the end of May. Money supply aggregate M2, comprised of M1 and quasi-monetary deposits resident time and savings deposits in dirham, commercial pre-payments in dirham and resident deposits in foreign currencies, decreased by 3.2 per cent to Dh832.1 billion in May from Dh859.2 billion at end-April. Money supply aggregate M3, which includes M2 plus government deposits at bank operating in the UAE as well as at the central bank, fell 1.3 per cent to Dh1.055 trillion.