UAE banking sector assets rise to AED 5.556 trillion as deposits and credit surge
UAE banking sector assets reached AED 5.556 trillion by end-March 2026, with deposits, credit and payments activity rising sharply, Central Bank data show Q1 growth.
The UAE banking sector recorded robust expansion in the first quarter of 2026, with total banking assets climbing to AED 5.556 trillion at the end of March. Central Bank statistics released this week show the increase reflected monthly growth of 1.5%—an AED 84 billion rise from February figures. The data also point to simultaneous gains in deposits, lending and payments activity across the banking system.
Assets climb to AED 5.556 trillion in March 2026
The Central Bank reported that total banking assets rose from AED 5.472 trillion at the end of February to AED 5.556 trillion by March 31, 2026. This AED 84 billion, or 1.5% month‑on‑month increase, underlines continued balance-sheet expansion across UAE banks. Officials said the growth cements the sector’s leading position regionally and reflects heightened transactional and lending activity during the quarter.
The asset expansion was broad-based, with increases recorded across multiple balance‑sheet items rather than concentrated in a single category. Analysts note that sustained liquidity inflows and renewed credit demand contributed to the rise. The Central Bank’s release framed the movement as part of a steady post‑pandemic recovery trajectory.
Credit and lending post quarterly gains, local credit leads
Total bank credit rose 2.5% between the end of February and the end of March, climbing to AED 2.6956 trillion from AED 2.6307 trillion. The month saw AED 64.9 billion in new financing granted, and the Central Bank attributed most of the increase to an AED 52.4 billion rise in local credit. That local lending uptick points to stronger domestic borrowing by businesses and households.
The lending mix showed growth in both consumer and corporate segments, supporting consumption and investment. Observers said the credit expansion should be monitored alongside loan quality indicators and macroeconomic trends to gauge sustainability.
Deposits increase while base money contracts
Customer and institutional deposits increased by AED 106 billion in March, lifting total deposits to AED 3.446 trillion from AED 3.340 trillion at the end of February. The deposit rise—about 1.4% month‑on‑month—provided banks with additional funding capacity for lending and liquidity management. Higher deposits were recorded across retail and wholesale channels, according to the Central Bank’s figures.
At the same time, the monetary base contracted by 4.3% to AED 879.5 billion by the end of March. The downward movement reflected a 21.9% drop in reserve account balances and a 4.6% reduction in cash management instruments such as monetary notes and Islamic deposit certificates. Offsetting these declines were notable increases in banks’ current accounts and overnight deposits with the Central Bank, which rose by 32.7%, and an 8.9% increase in currency in circulation.
Payments and cheque image volumes surge in Q1
Payments flows through the UAE Funds Transfer (UAEFT) system reached AED 6.66 trillion in the first quarter of 2026, split between AED 4.058 trillion in bank‑initiated transfers and AED 2.602 trillion from other participants. The high value of transfers underscores elevated economic activity and liquidity circulation across sectors. Market participants said the figures reflect both large wholesale movements and a rise in retail electronic payments.
Cheque image transactions also registered high usage, with cheques processed by image amounting to AED 346.737 billion across more than 5.51 million items in the quarter. The continued use of cheque imaging highlights ongoing reliance on traditional instruments even as digital payment adoption rises. Regulators and banks have pointed to such processing data when assessing the pace of digital migration and operational efficiency.
Gold holdings and targeted lending categories show modest gains
The Central Bank’s gold reserves rose by 5.54% in the first quarter to about AED 40 billion at the end of March, up from roughly AED 37.9 billion at the end of December 2025. The increase in precious metal holdings adds a tangible component to the central bank’s external and reserve management. Policymakers view diversified reserve composition as a buffer against market volatility.
On the credit side, consumer loans for personal consumption stood at AED 598.5 billion at the end of March, up from AED 583.9 billion at year‑end 2025—an AED 14.6 billion quarterly gain. Real estate financing rose to AED 236.6 billion from AED 234.0 billion in the prior quarter, a AED 2.6 billion increase. These movements indicate selective credit growth across household and property sectors during the quarter.
The Central Bank’s quarterly snapshot paints a picture of a growing, liquid and active UAE banking sector. Continued deposit accumulation, rising credit and brisk payments flows signal an economy with sustained momentum into Q2 2026.
