KHALED AL KHAWALDEH (ABU DHABI)
Real estate sector activities in the UAE maintained their lead as the largest business sector in terms of borrowing from banks operating in the country, capturing a share equivalent to 16.5% of the total financing granted to residents in 2023.
A recent statistical bulletin of the UAE Central Bank showed that construction and real estate borrowing reached Dh286.9 billion in December 2023, beating credit issued to other sectors including trade, manufacturing, and agriculture, despite the cumulative balance of those financings decreasing by 5.2% compared to 2022.
Moreover, loans, advances, overdrafts and real estate mortgage loans were the largest individual asset class held by banks, worth a whopping Dh1.17 trillion at the end of last year.
According to the data, the financial institutions sector was the most active in obtaining financing during the past year, with an increase of about 20%, reaching approximately Dh29.3 billion as additional financing.
On the other hand, the trade sector was the second most active sector in obtaining new financing, with an increase of more than Dh18.1 billion, raising the total financing balance from Dh136.5 billion to Dh154.6 billion by the end of last year. The sector included financing for wholesale activities, which saw its cumulative balance rise from Dh93.9 billion to Dh110.8 billion, along with financing for the retail sector, which reached a cumulative balance of Dh43.8 billion compared to Dh42.6 billion at the end of 2022.
Transport, storage, and communications sectors also witnessed growth in total bank financing by 17.8%, increasing by approximately Dh16.4 billion as additional financing to a total cumulative balance of Dh92.1 billion compared to a total of Dh75.7 billion at the end of 2022.
According to data, the cumulative balance of financing for manufacturing industries increased by Dh5 billion as new financing, reaching Dh89.3 billion from Dh84.3 billion, and financing granted to the water and electricity sector also increased by approximately Dh7.3 billion, bringing the total from Dh43.5 billion to Dh50.8 billion.