Gross bank assets in UAE rise 1% to AED4,296.5b in April

Abu Dhabi: Gross banks’ assets in the UAE, including bankers’ acceptances, increased by one per cent from AED4,254.5 billion at the end of March 2024 to AED4,296.5 billion at the end of April 2024.

The growth was driven by a 0.8 per cent increase in gross credit, which reached AED2,063.1 billion by the end of April 2024, up from AED2,047.0 billion at the end of March 2024, according to Central Bank of the UAE’s  (CBUAE) latest Monetary & Banking Developments report

The expansion in gross credit was fueled by a 0.7 per cent increase in domestic credit and a 1.4 per cent rise in foreign credit. The increase in domestic credit was primarily due to a 4.7 per cent growth in credit to the government sector and a 0.4 per cent increase in credit to the private sector, offsetting declines in credit to the public sector (government-related entities) and non-banking financial institutions.

Aggregate bank deposits also experienced a significant increase, rising by 2.3 per cent from AED2,657.1 billion at the end of March 2024 to AED2,717.5 billion at the end of April 2024, driven by a 2.7  per cent increase in resident deposits, which offset a 2.9  per cent decline in non-resident deposits.

Money supply aggregates boom

The growth in resident deposits was primarily attributed to a 13 per cent increase in government deposits and a 1.4  per cent rise in private sector deposits, with declines in government-related entities deposits and non-banking financial institutions deposits.

The Central Bank also reported notable changes in the various money supply aggregates. M1 increased by 1.6  per cent, from AED878.1 billion at the end of March 2024 to AED892.4 billion at the end of April 2024, due to a rise in currency in circulation outside banks and an increase in monetary deposits. M2 grew by 0.6 per cent, from AED2,134.8 billion to AED2,148.5 billion, while M3 experienced a more substantial increase of 2.8  per cent, from AED2,583.7 billion to AED2,657.3 billion.

The monetary base also expanded by 1.5 per cent, from AED703.7 billion at the end of March 2024 to AED714.3 billion at the end of April 2024. The growth was driven by an increase in banks’ and other financial companies’ current accounts and overnight deposits at the CBUAE, offsetting declines in currency issued, reserve accounts, and monetary bills and Islamic certificates of deposit.

Overall, the Monetary & Banking Developments report showcases a positive trajectory in the UAE’s banking and monetary landscape, with notable increases in gross banks’ assets, gross credit, aggregate bank deposits, and the various money supply aggregates.