Central Bank support package defers AED 13.5bn in loan payments, strengthening UAE banking sector resilience
Central Bank support package deferred AED13.5bn in loan payments for 135,031 customers, bolstering UAE bank resilience while driving non-performing loans down to 2.8% by Q2 2026.
The Central Bank of the UAE’s proactive support package, approved in March 2026, has enabled banks to offer deferred loan payments totalling AED 13.5 billion to affected customers, the regulator confirmed on July 30, 2026. The scheme, framed as a preventive measure to shore up financial institution resilience, has been applied across corporates, small and medium enterprises and individual borrowers. Authorities say the relief, together with targeted supervisory actions, has helped stabilise asset quality and maintain strong liquidity across the banking system.
AED 13.5bn Deferred Under Central Bank Support Package
The Central Bank support package has allowed banks to temporarily postpone instalment payments for customers experiencing financial strain, resulting in AED 13.5 billion of deferred obligations. That relief was reported in official data released by the Central Bank on July 30, 2026, and reflects the regulator’s precautionary approach to managing credit risk. The measure was introduced in March 2026 as part of a broader set of tools designed to preserve the sector’s stability without compromising long-term credit discipline.
Distribution of Relief by Borrower Type as of 30 July 2026
Data show the largest share of deferred amounts—AED 9.1 billion—was extended to large corporate borrowers, with AED 2.4 billion directed to small and medium enterprises and AED 2 billion to individuals. In terms of recipients, 127,753 were individual borrowers, 6,198 were SMEs and 1,080 were large companies, bringing the total number of beneficiaries to 135,031. The allocation underscores the Central Bank’s effort to target support where systemic risks could emerge while preserving access to finance for households and smaller firms.
Balance-sheet Growth Signals Continued Liquidity
The Central Bank reported robust balance-sheet growth across the banking sector through mid‑2026, with total assets rising 12.5% and gross loans increasing 18.1% as of June 30, 2026, compared with the same period in 2025. Deposits also expanded by 14% over that twelve‑month span, supporting banks’ funding profiles and lending capacity. Regulators and market participants interpret the simultaneous growth in assets, loans and deposits as a sign that liquidity remains ample while credit intermediation is expanding to meet demand.
NPLs Drop to Record Low After Regulatory Push
Non‑performing loans fell to 2.8% of total loans at the end of the second quarter of 2026, the lowest level on record and down sharply from 8.2% in 2020. Net non‑performing loans reached a historic low of 1.3% in the same period, compared with 3.6% in 2020, while the absolute volume of impaired loans declined to AED 76 billion at end‑Q2 2026 from AED 84 billion in Q1 2026. The steep reduction in both ratios and volumes reflects sustained improvement in asset quality and a recovery path that regulators attribute to both macroeconomic dynamics and supervisory interventions.
Supervisory Measures Cited by Central Bank
The Central Bank attributed the improvement in asset quality to an array of supervisory actions implemented over recent quarters, including intensified on‑site inspections, comprehensive asset quality reviews and enhanced dialogue with bank risk officers. Regulators said they strengthened credit risk management standards and updated guidelines on write‑offs and debt recovery to align with international best practices. These measures, combined with the targeted support package, were designed to reduce forbearance risks while ensuring timely recognition and remediation of problem credits.
The Central Bank’s approach has sought to balance temporary relief for borrowers with the need to preserve prudent lending standards, and officials emphasised that the package was part of a forward‑looking strategy to manage asset quality proactively. Market observers welcomed the falling NPL ratios and stronger capital metrics but noted the importance of continued monitoring, especially as banks re‑assess exposures once deferral programs end. The combination of relief measures, supervisory scrutiny and a resilient deposit base appears to have reinforced confidence in the UAE banking system heading into the second half of 2026.