Gross Banks' Assets Rise By 2.4% To AED 4.56 Billion At End Of December 2024

The Central Bank of the UAE (CBUAE) reported a 2.3% rise in the money supply aggregate M1, reaching AED 946.4 billion by December 2024, up from AED 924.8 billion in November 2024. This increase was due to a growth of AED 1.1 billion in currency outside banks and a AED 20.6 billion rise in monetary deposits.

Gross banks' assets, including bankers' acceptances, saw a 2.4% increase, moving from AED 4,451.4 billion at the end of November 2024 to AED 4,560.0 billion by December 2024. This growth reflects the overall expansion in financial activities during this period.

The monetary base expanded by 4.4%, reaching AED 780.6 billion at the end of December 2024 from AED 748.0 billion in November 2024. This growth was driven by a slight increase in currency issued (0.1%), reserve accounts (0.6%), and significant rises in banks & OFCs’ current accounts & overnight deposits (23.7%) and monetary bills & Islamic certificates of deposit (4.1%).

According to the Monetary & Banking Developments report for December 2024, M3 also rose by 0.4%, reaching AED 2,778.9 billion from AED 2,767.4 billion at the end of November 2024. The increase in M3 was primarily due to the rise in M2, despite a decrease of AED 27.1 billion in government deposits.

Gross credit experienced an uptick of 0.8%, growing from AED 2,163.4 billion at the end of November to AED 2,181.1 billion by December's close in 2024. This was mainly due to an increase in foreign credit by 8.3%, which compensated for a decline in domestic credit by 0.4%. Domestic credit fell because of reductions in public sector credit (government-related entities) by 2.5%, private sector credit by 0.2%, and non-banking financial institutions credit by another 2.5%. However, government sector credit saw a rise of 1.6%.

Banks' deposits increased by 1.5%, climbing from AED 2,804.4 billion at the end of November to AED 2,847.0 billion at December's end in the same year. The growth was attributed to increases in resident deposits by 0.5% and non-resident deposits significantly rising by 13.9%.

Resident Deposits Growth

Resident deposits grew due to increases across various sectors: government-related entities' deposits rose by 4.2%, private sector deposits increased by 0.9%, and non-banking financial institutions' deposits surged by an impressive rate of16 .5%. These gains outweighed a reduction in government sector deposits which fell by5 .2%.

The money supply aggregate M2 saw a rise of1 .7 %, moving fromAED2278 .9billion at November's end toAED2317 .5billion at December's closein2024 . This was drivenbythe elevatedM1and an additionalAED17 .0billion increaseinQuasi-Monetary Deposits.

The CBUAE's latest figures highlight significant shifts within the UAE's banking landscape towards the endof2024 . These changes reflect broader economic trends impacting both domesticandforeign financial activities within theregion .

With inputs from WAM