Prime Highlight
- UAE banking sector assets grew 0.8% in November to AED 5.25 trillion, driven by steady expansion in credit and deposits.
- Growth in both domestic and foreign lending supported the rise, reflecting stronger activity in key economic sectors.
Key Facts
- Gross credit increased 0.7% to AED 2.53 trillion, with domestic credit up AED 9 billion and foreign credit up AED 8.7 billion.
- Bank deposits rose 1% to AED 3.23 trillion, including a 1.4% increase in resident deposits and a 3% rise in government-related deposits.
Background
UAE banking sector assets grew 0.8% in November to AED5.25 trillion ($1.43 trillion), supported by steady expansion in credit and deposits, according to new data released by the Central Bank of the UAE (CBUAE).
The increase extended the sector’s growth trend, with gross banking assets rising from AED5.2 trillion in October. Gross credit climbed 0.7% to AED2.53 trillion, driven by gains in both domestic and foreign lending.
CBUAE said domestic credit increased by AED9 billion, while foreign credit rose by AED8.7 billion during the month. The growth reflected stronger lending to key sectors of the economy.
The private sector received 0.4% more credit, supporting the UAE’s “Projects of the 50” strategy, to boost private investment and lower reliance on oil and gas. The government sector received 2.6% more credit, and non-banking financial institutions experienced a 3.6% rise in lending, balancing out a 1% decrease in credit to government-affiliated entities.
Money supply data showed mixed trends. M1 fell by 1.7% because monetary deposits declined. At the same time, overall liquidity improved, as M2 grew by 1.5%, driven by an AED 58.2 billion increase in quasi-monetary deposits. M3 also rose by 1.5%, helped by an AED 8.6 billion increase in government deposits.
The central bank noted that this shift indicates money moving from current accounts into savings, time deposits and government holdings, supporting longer-term lending activity.
The monetary base strengthened by 1.7%, driven by a 21.5% rise in reserve accounts, a 2.6% increase in currency issued, and an 8.8% rise in monetary bills and Islamic certificates of deposit.
On the funding side, bank deposits rose 1% to AED3.23 trillion. Resident deposits climbed 1.4% to AED 2.97 trillion, supported by a 1.2% increase in private sector deposits and a 3% rise in government-related deposits.
