ABU DHABI: The liquid assets of the UAE's banking sector exceeded AED800 billion by the end of Q2 2024, according to the latest statistics of the Central Bank of the UAE (CBUAE).

The value of liquid assets recorded AED801.52 billion at the end of Q2 2024, a year-on-year (YoY) increase of 20.2 percent, or AED135 billion, compared to AED666.6 billion at the end of Q2-23, the Central Bank said in its Core Financial Soundness Indicators - Q2 2024 report, issued today.

According to the report, the value of liquid assets in the UAE banking sector increased quarter-on-quarter (QoQ) by 2 percent, or AED14.9 billion, compared to AED786.6 billion at the end of the Q1-2024.

The bank said in its report that the value of liquid assets in the banking sector accounted for 18.9 per cent of the banking sector's total assets of AED4.244 billion at the end of Q2 2024, up from 18.8 percent at the end of Q1 2024.

The bank noted that the UAE banking system is well-capitalised, with a total capital adequacy ratio of 18.3 percent at the end of Q2 2024, up from 18 percent at the end of Q1 2024 and 17.9 percent at the end of Q4 2023.

The bank explained that the capital adequacy ratio remains well above the minimum capital adequacy ratio of 13 percent, which includes a capital buffer of 2.5 percent and a minimum Tier 1 capital ratio of 8.5 percent, as stipulated in the Central Bank's regulations based on compliance with the Basel III Capital Guidelines, which banks in the UAE have been following since December 2017.

Regulatory Capital Ratios measure the amount of a bank's capital expressed as a percentage of risk-weighted assets. A high capital adequacy ratio provides protection for depositors and promotes the stability and efficiency of the economy's financial system.

According to the Core Financial Soundness Indicators report, the banking sector's Tier 1 Capital Ratio reached 17 percent at the end of Q2 2024, compared to 16.7 percent at the end of Q1 2024 and 16.6 percent at the end of Q4 2023.

The report indicated that the Common Equity Tier 1 capital ratio rose to 15.3 percent at the end of Q2 2024, compared to 15 percent at the end of Q1 2024 and 14.9 percent at the end of Q4 2023.