DUBAI, Feb 9 (Reuters) - Banks in the United Arab Emirates have reduced their use of a central bank stimulus scheme aimed at supporting liquidity during the COVID-19 pandemic, the central bank governor said. In March 2020, the UAE central bank launched a $70 billion package of capital and liquidity measures as part of a Targeted Economic Support Scheme (TESS). Some of the measures have been extended to June 2021. “The utilisation of the TESS programme, which has now come down to about 50% from its peak, is a strong indicator that banks are now gradually coming back to manage their credit books and navigate the way forward,” central bank Governor Abdulhamid Saeed said in a statement on Tuesday. Vital sectors of the UAE economy such as transport and tourism were hit hard by the coronavirus outbreak last year. The UAE economy is expected to show a 6% contraction in 2020. But Saeed said figures presented by financial institutions as of the end of 2020 were encouraging and showed the resilience of the banking sector, with lenders posting slight increases in gross assets, deposits and lending. He said falling profits at some banks suggested the “impact of a bad year, rather than a fundamental shift in solvency and the appetite to do business.” The central bank approved in excess of 15 billion dirhams ($4.1 billion) in dividends, based on banks’ compliance with supervisory requirements, he said.