Yemen Herald Editorial 
The banking sector in the United Arab Emirates demonstrated robust growth at the beginning of 2026, with total banking assets surpassing AED 5.41 trillion by the end of January. This marks a 1.4 percent increase from AED 5.339 trillion recorded in December 2025, as reported by the Central Bank’s latest monetary and banking developments report.
Total credit within the banking sector also saw an upward trend, expanding by 1.1 percent to reach AED 2.598 trillion, up from AED 2.57 trillion in December. This growth was primarily driven by a significant increase of AED 27.9 billion in domestic credit. Notably, lending to the government sector rose by 2.5 percent, while the private sector experienced a more modest increase of 0.6 percent. However, credit to other financial institutions declined by 5.7 percent, which slightly tempered the overall growth in credit.
Bank deposits in the UAE’s banking sector increased by 0.9 percent, reaching AED 3.337 trillion, compared to AED 3.307 trillion in December. Resident deposits accounted for a significant portion of this growth, rising by 1.2 percent to AED 3.046 trillion. In contrast, non-resident deposits saw a decline of 2.4 percent, totaling AED 290.7 billion.
Within the category of resident deposits, private sector holdings increased by 1 percent to AED 2.273 trillion. Deposits from government-related entities rose by 3.5 percent to AED 306.7 billion, while government deposits climbed by 2 percent to AED 401.3 billion. Conversely, deposits from other financial institutions fell by 6.7 percent to AED 65.3 billion.
The monetary base of the UAE also experienced growth, rising by 0.6 percent to AED 900.8 billion. This increase was supported by a notable 32.4 percent rise in reserve accounts, along with a 1.7 percent increase in currency issuance. However, there was a significant decline in banks’ current accounts and overnight deposits with the Central Bank.
Additionally, the money supply M1 rose by 0.9 percent to AED 1.081 trillion, reflecting increases in both currency in circulation and demand deposits. This overall positive momentum in the banking sector underscores the resilience and stability of the UAE’s financial landscape as it enters the new year.
About the Author
