Finance Sector Overview

The Abu Dhabi government constantly focuses on legislative reforms for financial sector so as to remain competitive in the rapidly changing international business environment.

Increased profitability, improved regulation and higher liquidity have all benefited the banking sector in Abu Dhabi. Higher government spending, and relatively low exposure to real estate projects, ensured that banks in the Emirate were less affected by the global economic crisis than other United Arab Emirates’ financial authorities.

During the past three years, there has been an urgent reassessment of unsecured regulations, which previously served to attract investment to  Abu Dhabi. These regulations are now considered unfavourable to restoring investor confidence in the banking system.



All UAE banks have been required by the Central Bank to achieve a capital adequacy requirement of above 10%. This obligation came as part of a raft of laws on provisions and capital adequacy.

The Central Bank introduced a series of long-awaited regulations on provisioning for bad loans. UAE banks now take provisions for bad loans on a quarterly basis, rather than delaying them until the end of the financial year. The new set of guidelines also outlined a framework for the evaluation of loans and advances.

Abu Dhabi banks typically offer a wide range of services, apart from traditional lending and deposit holding. These include insurance, brokerage services and asset management. Local banks have also opened Islamic financial units in response to growing demand for Sharia-compliant services, typically more risk averse than conventional banking.

The Abu Dhabi Exchange (ADX) has undergone rapid development over the last decade. Although the global economic crisis has slowed growth, indications are that ADX is recovering at a comfortable rate.
In 2011, the Exchange saw its first successful Initial Public Offering (IPO), which was followed by other attempts to enter the stock market.


Financial Institutions

•    UAE Central Bank
•    Sovereign Wealth Funds
•    Domestic banks
•    Foreign banks
•    Investment banks and brokerages
•    Development and postal banks
•    Offshore banks
•    Insurance companies
•    Pension funds
•    Mutual funds and asset-management firms
•    Venture capital and private-equity firms
•    Financial leasing companies


The official currency of the UAE is the UAE dirham, or AED. Dirham notes are circulated in 5, 10, 20, 50, 100, 200, 500, and 1000 denominations. One dirham is divided into 100 fils, coins include Dh1, 50, 25, 10 and 5 fils. The value is written on the notes in Arabic and English languages.

The dirham’s index is firmly linked to the United States dollar, with the value exchange rate of Dh3.67 = US $ 1.00 constant since the end of 1980.

Foreign currency of almost any denomination is readily exchanged in the UAE. According to information provided by UAE Central Bank, by the end of 2010 the number of money changers operating in the Abu Dhabi climbed to 24 for main offices and to 119 for branches.

Laws & Regulations

The financial regulator for the Emirate of Abu Dhabi is the United Arab Emirates Central Bank. Its responsibilities include issuing currency, maintaining gold and foreign currency reserves, regulating banks and controlling credit to encourage balanced economic growth.

Initial laws and regulations are posted on the Central Bank’s website, with the latest amendments and reports promptly published. These include:

•    The Central Bank law;
•    Law of Islamic Banking;
•    Circulars related to anti-money laundering;
•    Banks and Financial Institutions governing laws.

Business people are advised to research the latest amendments and articles for developments within various economic sectors. These are constantly being updated with immediate effect.