The UAE banks assets growth in 2025 marked a strong performance with total assets reaching AED 5.2 trillion by the end of September 2025. This solid growth highlights the continued strength and confidence in the United Arab Emirates banking sector, driven by increasing deposits, expanding credit, and rising money supply in the economy.
Robust Growth in Banks’ Assets
By the end of September, the total assets held by banks in the United Arab Emirates increased by 2.2 percent compared to the previous month. This took the asset base from AED 5,087 billion in August to AED 5,199.9 billion. This growth shows that the banking sector remains a vital pillar supporting economic activity in the country, reflecting expanding business operations and increased financial transactions.
Several factors contributed to this rise in assets, including higher levels of credit extended by banks and a rise in deposits from both residents and non-residents. The overall expansion reflects a healthy demand for loans and increased trust in the financial system by depositors.
Increasing Money Supply Indicates More Liquidity
One of the key indicators of financial health is the money supply, which shows how much money is circulating in the economy and available for spending or investment. The money supply is often measured in three aggregates: M1, M2, and M3, each representing progressively broader definitions of money.
M1 – Narrow Money
The narrowest measure, M1, which includes currency in circulation and monetary deposits, grew by 0.4 percent in September. This small but important increase means that more physical cash was circulating outside banks, and the amount held in demand deposits, which can be accessed immediately, also went up. More currency circulating can point to rising economic activity, as businesses and consumers spend more freely.
M2 – Broad Money
M2 includes M1 plus quasi-monetary deposits, such as savings accounts and time deposits that are less liquid but still accessible. M2 rose by 1.0 percent, reflecting a healthy increase in people’s savings and investments in the banking system. This growth shows that people and businesses are not only spending but also saving more, which strengthens the banks’ capacity to lend.
M3 – Broadest Money Supply
The broadest measure, M3, which includes M2 plus government deposits, increased by 1.4 percent. This suggests that government funds deposited with banks also grew, adding to the overall liquidity available in the financial system. A rising M3 usually means that more money is available for lending and investment, which can support economic growth.
Monetary Base Sees a Moderate Drop
Interestingly, while the money supply increased, the monetary base, which consists of currency in circulation plus bank reserves held at the central bank, decreased by 2.5 percent in September. This was mainly due to banks reducing the reserves they hold with the central bank.
Banks often keep reserves to meet regulatory requirements and to manage liquidity risks. A drop in reserves could mean that banks feel confident in their liquidity position and are using more funds for lending or investment. However, the slight decrease in the monetary base should be watched carefully as it can affect overall money supply and liquidity if the trend continues.
Credit Growth Boosts Economic Activity
Credit, or loans extended by banks to various sectors, plays a crucial role in fueling economic growth. In September, gross credit in the United Arab Emirates increased by 2.5 percent, rising from AED 2,417 billion to AED 2,478.8 billion. This increase in lending signals that businesses, government entities, and individuals are borrowing more to finance projects, operations, or consumption.
Breakdown of Credit Growth
Credit growth was balanced between domestic and foreign sectors. Domestic credit expanded significantly, driven by higher lending to the government, public sector entities, private businesses, and financial institutions.
Government sector credit increased modestly, reflecting ongoing funding for public projects and services. Lending to government-related entities grew strongly, supporting infrastructure and development initiatives. Private sector credit also rose steadily, showing confidence among businesses and households. Loans to non-banking financial institutions surged, indicating greater activity in financial markets and services.
This broad-based credit expansion is a positive sign that economic players across the board are accessing funds, which can stimulate growth and employment.
Deposits on the Rise: Trust in Banks Strengthens
Deposits are the lifeblood of banks, providing the funds they need to lend and invest. In September, deposits at banks in the United Arab Emirates rose by 1.8 percent, from AED 3,128.5 billion to AED 3,186 billion. Both resident and non-resident deposits contributed to this increase.
Resident Versus Non-Resident Deposits
Resident deposits, which include those from individuals, companies, and government entities within the United Arab Emirates, grew by 0.7 percent to AED 2,891.4 billion. Non-resident deposits, or funds from foreign investors and companies, jumped by a striking 14.5 percent to AED 294.6 billion, indicating increased foreign confidence in the United Arab Emirates banking system.
Within resident deposits, government deposits saw a slight decline. Government-related entities’ deposits remained relatively stable. Private sector deposits rose moderately. Deposits from non-banking financial institutions grew substantially.
This pattern suggests that while government-related deposits pulled back slightly, the private sector and financial institutions boosted their bank holdings, reflecting diversification and broad-based economic confidence.
What the Numbers Mean for the United Arab Emirates Economy
The growth in banks’ assets to AED 5.2 trillion by September 2025 signals a resilient and expanding financial sector. Rising credit and deposits indicate that both businesses and individuals are actively engaging with banks, whether through borrowing or saving.
This environment is conducive to continued economic growth as banks provide the necessary financial support for business investments, government projects, and consumer spending. The strong inflow of deposits, especially from non-residents, highlights the United Arab Emirates position as a regional financial hub and its attractiveness to international investors.
Future Outlook for the Banking Sector
Looking ahead, the United Arab Emirates banking sector is poised to maintain its growth momentum. The steady rise in money supply and credit indicates healthy liquidity conditions that support economic expansion.
The slight decline in the monetary base points to banks actively managing their reserves, possibly reallocating funds toward lending and investment activities. The continued rise in deposits from diverse sources will strengthen banks’ ability to finance further growth.
As the global economic landscape evolves, the United Arab Emirates banking sector will need to stay agile and responsive, balancing growth opportunities with risk management to sustain long-term stability.
Conclusion
The growth in United Arab Emirates banks assets in 2025 reflects a banking sector that is growing steadily and adapting well to economic demands. With assets surpassing AED 5.2 trillion, credit expanding across key sectors, and deposits increasing notably, the country’s financial institutions continue to play a crucial role in supporting economic development.
For investors, businesses, and policymakers, these developments offer assurance of a robust banking system ready to meet future challenges and opportunities, cementing the United Arab Emirates position as a leading financial center in the region.
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