Financial Overview: UAE Banking Sector September 2025

Growth in Banking Assets

The latest figures from the Central Bank of the UAE (CBUAE) reveal a steady growth in the banking sector’s assets. Total gross assets rose by 2.2%, climbing from AED 5,087 billion at the end of August 2025 to AED 5,199.9 billion by the end of September 2025. This upward trend reflects the overall resilience and vitality of the financial environment in the UAE.

Money Supply Increases

M1 Aggregate Growth

In terms of money supply, the aggregate M1 witnessed an increase of 0.4%, moving from AED 1,028.7 billion in August to AED 1,032.7 billion in September. This growth can be attributed primarily to a 1.0% rise in currency circulating outside banks, along with a 0.3% increase in monetary deposits. Such changes illustrate a slight expansion in liquidity available to consumers and businesses alike.

Expanding M2 and M3 Metrics

Similarly, the M2 money supply aggregate saw a 1.0% boost, rising from AED 2,562.9 billion to AED 2,589.3 billion. This increase was largely driven by a growth of AED 22.4 billion in Quasi-Monetary Deposits, indicating robust activity in less liquid forms of money.

The M3 aggregate also experienced an uptick of 1.4%, moving from AED 3,079.5 billion to AED 3,123.3 billion during the same period. The rise in M3 was supported by both the increase in M2 and a substantial AED 17.4 billion growth in government deposits, highlighting the government’s active role in the banking ecosystem.

Changes in the Monetary Base

Interestingly, the monetary base recorded a decrease of 2.5%, dropping from AED 854.1 billion at the end of August to AED 832.5 billion by the end of September. This decline was primarily caused by an 8.9% reduction in reserve accounts, overshadowing a modest 0.9% increase in currency issued. Additionally, there were reductions in banks’ current accounts and overnight deposits at the CBUAE by 2.4%, alongside a 0.9% decline in monetary bills and Islamic certificates of deposit.

Credit Growth Dynamics

Rise in Gross Credit

The UAE banking sector also saw an increase in gross credit, which rose by 2.5% from AED 2,417.3 billion to AED 2,478.8 billion. This growth resulted from a combination of increases in both domestic and foreign credit, with domestic credit up by AED 43.9 billion and foreign credit by AED 17.6 billion.

The domestic credit growth can be further dissected, showing increases across various sectors:

• Government sector credit rose by 0.4%.
• Public sector (government-related entities) credit surged by 7.2%.
• Private sector credit climbed by 1.5%.
• Non-banking financial institutions experienced a significant jump of 9.1%.

Bank Deposits on the Rise

In terms of bank deposits, there was a notable 1.8% increase, with total deposits growing from AED 3,128.5 billion at the end of August to AED 3,186 billion by September’s end. The growth in depositing behavior was largely driven by a 0.7% increase in resident deposits, which reached AED 2,891.4 billion. Non-resident deposits saw an even more significant rise of 14.5%, totaling AED 294.6 billion.

Breakdown of Resident Deposits

When examining resident deposits, government sector deposits experienced a slight decline of 0.5%, while those from government-related entities also dipped by 0.1%. Conversely, private sector deposits showed a modest gain of 0.7%, and non-banking financial institutions enjoyed a robust increase of 13.8%, indicating a shift in deposit dynamics among different sectors.

This financial data provides insightful perspectives on the current landscape of the UAE banking sector as of September 2025, demonstrating sustained growth in various metrics while also highlighting areas of decline that merit attention.