The UAE banking sector continued its steady expansion, with total assets rising to AED4.749 trillion ($1.29 trillion) by the end of April 2025. This reflects a 0.6 percent month-on-month increase, according to the latest Monetary & Banking Developments report released by the Central Bank of the UAE (CBUAE).
Credit Growth Led by Public and Private Sectors
Total bank credit rose 0.9 percent month-on-month, reaching AED2.259 trillion at the end of April. This growth was driven by an AED12.3 billion increase in domestic credit and AED7.1 billion in foreign credit. Within domestic lending, credit to the government sector rose by 0.7 percent, the public sector (government-related entities) by 1.2 percent, and the private sector by 0.6 percent. However, credit extended to non-banking financial institutions declined sharply by 4.3 percent.
Deposit Levels Climb to New Highs
Total bank deposits surpassed AED2.965 trillion in April, up 1 percent from AED2.936 trillion in March. Resident deposits inched up by 0.1 percent to AED2.689 trillion, while non-resident deposits recorded a strong 10.9 percent surge, reaching AED275.6 billion.
In terms of resident deposits, the government sector posted a 0.9 percent increase, and the private sector added 1.1 percent. However, deposits from non-banking financial institutions declined by 9.2 percent, while government-related entities posted a 6.5 percent drop.
Mixed Trends in Monetary Aggregates
The monetary aggregate M1, which includes currency in circulation and demand deposits, rose 2.6 percent to AED1.0119 trillion, driven by a AED26.9 billion increase in monetary deposits. This gain offset a AED1.2 billion decline in currency in circulation outside banks.
In contrast, M2—which includes M1 plus quasi-monetary deposits—fell marginally by 0.1 percent to AED2.435 trillion. This was due to a AED27.8 billion fall in quasi-monetary deposits. The broader M3 aggregate rose slightly by 0.2 percent to AED2.8982 trillion, supported by a AED6.6 billion increase in government deposits.
Central Bank Balance Sheet and Foreign Assets Expand
The UAE’s monetary base declined by 1.7 percent, dropping from AED833.1 billion in March to AED819 billion in April. This was largely attributed to a 2.5 percent decline in issued currency and a 32 percent fall in reserve accounts. Despite this, there was a notable 159.8 percent increase in current accounts and overnight deposits held by banks at the central bank, along with a 3.1 percent rise in monetary bills and Islamic certificates of deposit.
Meanwhile, the central bank’s foreign assets rose slightly to AED937.5 billion in April from AED935.2 billion in March. These included AED403.2 billion in bank balances and deposits abroad, AED490.1 billion in foreign securities, and AED44.1 billion in other foreign assets.
CBUAE’s total balance sheet stood at AED972.3 billion. Liabilities and capital comprised AED449.1 billion in deposit accounts, AED279.9 billion in monetary bills and Islamic certificates, AED165.2 billion in currency notes and coins, AED33.2 billion in other liabilities, and AED45 billion in capital and reserves. On the asset side, the breakdown included AED210.9 billion in cash and bank balances, AED208 billion in deposits, AED516.8 billion in investments, AED0.5 billion in loans, and AED36.2 billion in other assets.
