The UAE banking sector attracted record local deposits worth approximately 460 billion dirhams last year, the highest in the history of the banking sector. The cumulative balance reached 3.307 trillion dirhams by the end of last December, compared to 2.847 trillion dirhams at the end of December 2024, marking a 16% annual growth. The sector also maintained its leadership in the Arab and Gulf regions in terms of asset value, which reached 5.34 trillion dirhams by the end of last year, also an all-time high. According to data released yesterday by the Central Bank of the UAE, there was a significant growth in banking sector indicators throughout the past year. Bank assets recorded an annual increase of 780 billion dirhams, equivalent to a 17% growth compared to 4.56 trillion dirhams at the end of 2024. The steady increase in deposits in local banks reflects high confidence in economic and banking stability, as well as attractive returns and relatively competitive interest rates. This growth is also attributed to increased foreign currency inflows and a rise in foreign direct investment in various sectors, led by the real estate sector. According to the data, total bank credit also increased, reaching 2.570 trillion dirhams at the end of the observation period, compared to 2.181 trillion dirhams at the end of 2024, an annual increase of 389 billion dirhams, equivalent to a 17.8% annual growth. By the end of last year 2025, the foreign assets owned by the Central Bank reached 1.058 trillion dirhams, compared to 860 billion dirhams at the end of 2024, an annual increase of 198 billion dirhams, equivalent to a 23% growth. The Central Bank's balance sheet also grew, reaching 1.093 trillion dirhams by the end of December 2025, compared to 895.8 billion dirhams at the end of 2024. A report on banking developments for December alone showed that the narrow money supply (M1) increased during December 2025 to about 1.071 trillion dirhams, compared to about 1.048 trillion dirhams at the end of last November, recording a growth of 2.2%, supported by an increase in currency in circulation outside banks and cash deposits. The broad money supply (M2) increased to about 2.75 trillion dirhams, compared to about 2.67 trillion dirhams, a growth of 3.2%, due to an increase in quasi-money deposits by about 62 billion dirhams. Meanwhile, the broadest money supply (M3) increased to about 3.255 trillion dirhams, compared to about 3.216 trillion dirhams, achieving a growth of 1.2%, despite a decline in government sector deposits. The monetary base increased during December 2025 by 5.4% compared to the end of the previous November, reaching about 895.7 billion dirhams, driven by a 1.9% increase in currency issued and a 63.4% increase in current accounts and overnight deposits of banks and other financial institutions with the Central Bank, despite a 9.1% decrease in reserve accounts.
