The UAE’s banking sector continues to show robust growth, with gross bank assets, including bankers’ acceptances, rising by 1.0 percent to AED 4,296.5 billion ($1.17 trillion) at the end of April 2024, up from AED 4,254.5 billion at the end of March 2024, according to the latest Monetary & Banking Developments report from the Central Bank of the UAE (CBUAE).
Credit Growth
Gross credit increased by 0.8 percent, from AED 2,047.0 billion at the end of March 2024 to AED 2,063.1 billion at the end of April 2024. This growth was driven by a 0.7 percent rise in domestic credit and a 1.4 percent increase in foreign credit. Within domestic credit, government sector credit expanded by 4.7 percent and private sector credit grew by 0.4 percent, counterbalancing declines of 0.5 percent in public sector credit and 3.8 percent in credit to non-banking financial institutions.
Deposit Expansion
Aggregate bank deposits rose by 2.3 percent, reaching AED 2,717.5 billion at the end of April 2024, up from AED 2,657.1 billion at the end of March 2024. The increase was primarily due to a 2.7 percent rise in resident deposits, which offset a 2.9 percent decline in non-resident deposits. Growth in government and private sector deposits, by 13.0 percent and 1.4 percent respectively, was significant, although this was partially offset by a 0.5 percent decrease in government-related entities’ deposits and an 18.8 percent drop in non-banking financial institutions’ deposits.
Monetary Aggregates
- M1: The money supply aggregate M1 increased by 1.6 percent, from AED 878.1 billion at the end of March 2024 to AED 892.4 billion at the end of April 2024, driven by a AED 1.2 billion rise in currency in circulation and a AED 13.1 billion increase in monetary deposits.
- M2: The money supply aggregate M2 grew by 0.6 percent, reaching AED 2,148.5 billion at the end of April 2024, up from AED 2,134.8 billion at the end of March 2024. The growth in M1 was the main contributor, despite a AED 0.6 billion reduction in quasi-monetary deposits.
- M3: The money supply aggregate M3 saw a 2.8 percent increase, rising to AED 2,657.3 billion at the end of April 2024 from AED 2,583.7 billion at the end of March 2024. This increase was due to the growth in M2 and a AED 59.9 billion rise in government deposits.
Monetary Base
The monetary base expanded by 1.5 percent, from AED 703.7 billion at the end of March 2024 to AED 714.3 billion at the end of April 2024. This was largely due to a 72.0 percent increase in banks and other financial corporations’ current accounts and overnight deposits at the CBUAE, which overshadowed declines in currency issued, reserve accounts, and monetary bills & Islamic certificates of deposit.
The latest data from the CBUAE underscores the dynamic nature of the UAE’s banking sector, marked by steady growth in assets, credit, and deposits. As the nation continues to navigate the post-pandemic economic landscape, these financial indicators highlight a resilient and expanding banking infrastructure.
