Bankers in the United Arab Emirates have good reason to be happy. Despite softer economic growth in the domestic economy in recent years, the performance of the country's lenders has remained relatively buoyant. By most key indicators, including capitalisation, liquidity and profitability, Emirati banks are in rude health. This matters, because opportunities for growth in the UAE are likely to be less abundant than they once were, at least in the short term. Most estimates expect gross domestic product to hit between 2.5% and 3% in 2019, figures which fall well below recent historical norms. Nevertheless, Emirati banks are opening 2019 from a position of considerable strength. The sector's Tier 1 capital ratio stood at 16.6% by the end of the third quarter of 2018, while its capital adequacy and liquid assets ratio were 17-9% and 15.3%, respectively, according to data from the Central Bank of the UAE. Meanwhile, the total assets of Emirati banks grew by 7-4% year on year in the third quarter, though gross credit growth came in at 3.7% over the same period. Total deposits also grew by 9.7%.
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