UAE Banking Sector Assets Surpass AED 5 Trillion, Showing 10% Growth

The UAE's banking sector showed strong momentum in July 2025, with total banking assets hitting 5.024 trillion dirhams - a 1% jump from the previous month. More impressive is the seven-month performance: assets grew by over 10% since December 2024, adding 464 billion dirhams to the system. This growth signals robust economic activity and confidence in the UAE's financial sector.

Credit growth tells a similar story. Total credit rose 1.4% in July alone, reaching 2.336 trillion dirhams. Since the start of 2025, credit expanded by 8.5%, or 185 billion dirhams. The Central Bank attributes this to increased domestic lending worth 21 billion dirhams and foreign credit growth of 10.9 billion dirhams.

The domestic credit surge came from multiple sectors. Government borrowing increased 5.2%, while government-linked entities saw credit rise 1.5%. Private sector credit grew 0.5%, and non-bank financial institutions borrowed 2.5% more. This broad-based growth suggests the economy is expanding across different areas rather than relying on just one sector.

Bank deposits also climbed, rising 1.1% in July to reach 3.080 trillion dirhams. Resident deposits grew 1.1% to 2.82 trillion dirhams, while non-resident deposits increased 1% to 259.7 billion dirhams. Government deposits jumped 2.9%, and government-linked entity deposits surged 5%. Private sector deposits rose 0.7%, though non-bank financial institution deposits dropped 11.1%.

Money supply figures show the financial system's liquidity remains healthy. M1 money supply edged up 0.3% to 1.029 trillion dirhams in July, driven by a 6.8 billion dirham increase in monetary deposits that offset a 3.5 billion dirham decline in cash outside banks. M2 money supply grew 0.6% to 2.547 trillion dirhams, boosted by a 12.4 billion dirham rise in quasi-monetary deposits.

The Central Bank's foreign assets remained stable at 969 billion dirhams in July, virtually unchanged from June's 969.3 billion dirhams. These assets include 333.8 billion dirhams in bank balances and deposits abroad, 583.7 billion dirhams in foreign securities, and 51.5 billion dirhams in other foreign assets.

For investors and policymakers, these numbers suggest the UAE banking system is in good shape. The steady growth in both assets and deposits indicates people and businesses trust the banks with their money. Credit expansion shows banks are willing to lend, which helps fuel economic growth. The balanced growth across government, private, and foreign sectors also reduces risk by avoiding over-concentration in any single area.

The Central Bank's balance sheet decreased slightly to 1.003 trillion dirhams in July from 1.004 trillion in June. Current accounts and deposits made up 480 billion dirhams, while monetary bills and Islamic certificates of deposit totaled 290 billion dirhams. Currency in circulation accounted for 163.8 billion dirhams, with capital and reserves at 44.4 billion dirhams.