Family credit in the UAE banking sector surged to approximately $115 billion (AED 422 billion) last year, according to the Arab Monetary Fund’s (AMF) latest data. This represents one of the highest family credit volumes in the Arab world, following closely behind Saudi Arabia, which recorded family credit of around $331.6 billion in the same period.
The UAE’s banking sector has demonstrated strong growth, with family credit expanding by 11.3%, marking it as one of the fastest-growing markets in the region. The increase was second only to Algeria, which led the growth with a 12.8% rise. Across the Arab world, family credit accounted for 38% of total private sector credit by the end of 2023, up from 37.1% in the previous year.
Strong Financial Performance in 2024
Recent data from the Central Bank of the UAE (CBUAE) revealed that the banking sector’s liquid assets had surpassed Dh800 billion by the close of the second quarter of 2024, reaching Dh801.52 billion. This represents a year-on-year increase of 20.2%, or Dh135 billion, compared to Dh666.6 billion in Q2 2023, as highlighted in the Core Financial Soundness Indicators report.
In terms of capital adequacy, the banking sector’s Tier 1 Capital Ratio reached 17% by the end of Q2 2024, a slight increase from 16.7% in Q1 2024 and 16.6% at the end of 2023. Similarly, the Common Equity Tier 1 capital ratio rose to 15.3%, indicating continued financial stability in the sector.
Regional Growth and Banking Sector Performance
The AMF also noted that the UAE holds the largest share of the Arab banking sector’s assets, representing 24.3% of the total. The sector saw asset growth of 11%, driven by increased credit issuance and investments. By contrast, Saudi Arabia’s banking sector grew by 9.3%, fueled by an 11.5% rise in real estate loans and a broader expansion across other economic sectors.
At the end of 2023, the total assets of Arab banks rose to $4.574 trillion, up from $4.355 trillion in 2022, marking a 5% year-on-year growth, according to the AMF report. The UAE remains a key player in this regional financial expansion, with its banking system continuing to demonstrate resilience and growth amid global economic fluctuations.
