UAE Bank Assets Reach 5.25 Trillion Dirhams as Credit and Deposits Expand

UAE bank assets climbed to 5.25 trillion dirhams ($1.43 trillion) in November, marking a 0.8 percent increase from October, as both credit and deposits continued to grow, according to the Central Bank of the UAE’s latest report.

Gross banking assets rose from 5.2 trillion dirhams in the previous month. Gross credit increased 0.7 percent to 2.53 trillion dirhams, supported by growth in domestic and foreign lending. Domestic lending contributed to a 0.4 percent rise in credit to the private sector, reflecting the UAE’s “Projects of the 50” agenda, which aims to boost private investment and reduce reliance on hydrocarbons.

The central bank highlighted that the expansion in gross credit was driven by a 9 billion dirham increase in domestic credit and an 8.7 billion dirham rise in foreign credit. Within domestic lending, credit to the government sector grew 2.6 percent, lending to the private sector rose 0.4 percent, and loans to non-banking financial institutions increased 3.6 percent. At the same time, credit to public sector entities fell by 1 percent.

The report also showed a shift in the money supply. The narrow measure of money, M1, decreased by 1.7 percent, primarily due to a decline in monetary deposits. Broader measures, however, posted notable growth. M2 rose 1.5 percent, reflecting a 58.2 billion dirham increase in quasi-monetary deposits. M3, which includes government deposits, also expanded by 1.5 percent, boosted by an 8.6 billion dirham rise in government deposits.

Analysts said the decline in M1 alongside growth in M2 and M3 points to a liquidity transformation, with funds moving from checking accounts into savings, time deposits, and government accounts, which can support longer-term lending.

The banking system’s foundation strengthened as the monetary base grew 1.7 percent. The increase was led by a 21.5 percent rise in reserve accounts, a 2.6 percent growth in currency issued, and an 8.8 percent expansion in monetary bills and Islamic certificates of deposit.

Bank deposits also rose, reaching 3.23 trillion dirhams, up 1 percent from the previous month. Resident deposits grew 1.4 percent to 2.97 trillion dirhams. Within this segment, the private sector saw a 1.2 percent increase, while deposits from government-related entities jumped 3 percent.

The November data underscores the resilience of the UAE banking sector, reflecting steady credit expansion, strong deposit growth, and the continued ability of banks to support economic projects and private investment initiatives across the country.s