Central Bank of the UAE Reports Growth in Banking Sector

The Central Bank of the UAE (CBUAE) has released its monetary and banking developments report for January 2024, highlighting key indicators of the banking sector’s performance. 

The report reveals growth in gross assets, credit, deposits, and monetary aggregates, providing insights into the state of the UAE’s financial landscape.

Growth in Gross Assets and Credit:

According to the CBUAE, gross banks’ assets, including bankers’ acceptances, increased by 0.8% from Dh4.075 trillion to Dh4.109 trillion between December 2023 and January 2024. Concurrently, gross credit grew by 0.2% from Dh1.991 trillion to Dh1.996 trillion during the same period.

The rise in gross credit was primarily driven by a 1.9% increase in foreign credit, offsetting a marginal decrease of 0.01% in domestic credit. 

Notably, credit to the private sector recorded a 0.5% increase, while credit to the government, public, and non-banking financial institutions experienced contractions.

Increase in Total Bank Deposits:

Total bank deposits increased by 0.7%, climbing from Dh2.521 trillion to Dh2.539 trillion. This growth was attributed to a 0.9% increase in resident deposits despite a 1.8% decrease in non-resident deposits.

The monetary base expanded by 1.8%, reaching Dh670.9 billion by January 2024. 

This increase was primarily driven by a 12.8% rise in monetary bills and Islamic certificates of deposit, outweighing reductions in other components such as currency issued, reserve accounts, and banks’ current accounts.

Money Supply Aggregates:

The money supply aggregate M1 increased by 0.1%, while M2 and M3 grew by 0.2% and 1.3%, respectively. 

These increases were fueled by currency in circulation, monetary deposits, quasi-monetary deposits, and an augmentation in government deposits.