Wed 11-04-2018 20:36 PM
ABU DHABI, 11th April, 2018 (WAM) — Guarantees provided by the UAE-based banks in February 2018 increased to AED389.4 billion from AED388.98 billion in January, with industry reports expecting a further increase in the value of this facility in line with the current mobility recorded across different economic platforms.
Industry analysts attribute the increase in the value of bank guarantees to the economic boom witnessed across all sectors, particularly the commercial platform, which is considered a main tributary to the national economy.
According to official statistics the bank guarantees in November 2017 amounted to around AED389.4 billion, accounting for 10.1 percent of the gross static account balances which stood at AED3.826 trillion by the end of November 2017.
According to UAE Central Bank data, the end of 2017 saw a decline in bank guarantees during Q3 to AED385.9 billion and to AED384.47 in Q4.
A bank guarantee is a promise from a bank or other lending institutions that if a particular borrower defaults on a loan, the bank will cover the loss.
WAM/Hatem Mohamed/Hassan Bashir