UAE Banks Achieve Historic AED 4.2 Trillion Assets Milestone In February 2024

In a significant financial milestone, the United Arab Emirates has witnessed its gross bank assets surpass the AED4.2 trillion mark for the first time by the end of February 2024. This landmark achievement was highlighted in the latest monetary and banking developments report released by the Central Bank of the United Arab Emirates (CBUAE). The report detailed a year-on-year increase in total banking assets, including bank acceptance certificates, by approximately AED450.2 billion, marking an annual growth rate exceeding 12 percent from AED3.748 trillion in February 2023.

The data further revealed a monthly increase in total banking assets by 2.2 percent to AED4.198 trillion at the end of February 2024, up from AED4.109 trillion in January. This growth is attributed to a 0.9 percent rise in gross credit from AED1.996 trillion at the end of January to AED2.014 trillion at the end of February 2024, driven primarily by a 1.1 percent increase in domestic credit. This increase in domestic credit was supported by growth across various sectors, including government, public (government-related entities), private sector, and non-banking financial institutions.

Moreover, total bank deposits saw a significant uptick of 2.7 percent, rising from AED2.540 trillion at the end of January 2024 to AED2.608 trillion by February's end. This rise was fueled by a 2.5 percent increase in resident deposits and a notable 5.0 percent increase in non-resident deposits. Specifically, deposits from the public sector (government-related entities) surged by 18.4 percent, alongside a 2.0 percent rise in private sector deposits.

The report also highlighted an expansion in the monetary base by 2.7 percent, reaching AED688.7 billion at the end of February 2024 from AED670.9 billion at January's end. This expansion was led by increases in currency issued, reserve account balances, and monetary bills & Islamic certificates of deposit, despite reductions in banks & OFCs’ current accounts & overnight deposits at CBUAE.

Furthermore, the money supply aggregates showed positive trends with M1 increasing by 2.0 percent to AED847.0 billion, M2 rising by 3.8 percent to AED2.105 trillion, and M3 expanding by 2.3 percent to AED2.535 trillion at the end of February 2024. These increases were primarily due to rises in currency circulation outside banks and monetary deposits for M1, elevated M1 levels and quasi-monetary deposits for M2, and an augmented M2 for M3 despite a fall in government deposits.

This comprehensive financial growth underscores the robustness of the UAE's banking sector and its critical role in supporting economic development within the country.

With inputs from WAM