Credit expansion led by households and GREs
Total UAE banking assets, including bankers’ acceptances, increased 0.2% month-on-month to AED5.57 trillion at end-April, up from AED5.556 trillion in March.
Gross bank credit grew faster than assets, rising by AED25.2 billion, or 0.9%, to AED2.721 trillion. Domestic credit drove this increase, adding AED18.5 billion over the month.
Within domestic lending, the private sector remained the main growth engine. Lending to individuals increased by AED6.2 billion and contributed around 0.3 percentage points to domestic credit growth. Housing loans led this rise, followed by personal consumer loans, underlining the strength of retail demand and continued confidence in household balance sheets.
Government-related entities (GREs) also added momentum. Credit to GREs rose by AED7.7 billion, or 2.3%, contributing about 0.4 percentage points to domestic credit growth. Credit to both the government and corporate sectors made positive, though smaller, contributions, each adding about 0.1 percentage points to the monthly expansion.
All major sectors recorded positive contributions to credit growth except other financial corporations, which showed no net change during the month. The pattern signals a system where real-economy lending continues to expand, with households and GREs absorbing a larger share of new credit. For banks, this mix supports yields but also raises the importance of risk selection and collateral quality, particularly in mortgage and consumer books.
Deposits reshape funding as liquidity tightens
On the liability side, total bank deposits increased by 0.7% to AED3.469 trillion at end-April, from AED3.446 trillion a month earlier. The entire increase came from resident deposits, which also rose 0.7% to AED3.162 trillion, while non-resident deposits were broadly stable at AED307.6 billion.
Within resident funding, the private sector provided the largest boost. Private-sector deposits rose 1.4% to AED2.31 trillion, contributing about one percentage point to overall monthly deposit growth. Government deposits also expanded, rising 4.6% to AED446.8 billion and adding around 0.6 percentage points to resident deposit growth.
However, this strength was partly offset by outflows from other segments. Deposits of government-related entities fell 6.6% to AED339.3 billion, cutting around 0.8 percentage points from resident deposit growth. Deposits of other financial corporations also dropped 6.6% to AED65.6 billion, subtracting a further 0.1 percentage points. The funding mix is therefore tilting further toward private and central government money, and away from GREs and financial intermediaries.
Monetary indicators show a more nuanced liquidity picture. Narrow money (M1) decreased by 0.8% to AED1.064 trillion, driven by a 0.9% fall in monetary deposits and a 0.2% decline in currency in circulation. Broader aggregates were more stable: M2 was broadly unchanged at AED2.87 trillion, while M3 stayed around AED3.407 trillion, with government deposits flat at AED537.4 billion.
The monetary base fell more sharply, down 1.6% from AED880.2 billion to AED865.8 billion. This reflected a 26.3% drop in reserve requirements, a 3.5% decline in monetary bills and Islamic certificates of deposit, and a 1.5% fall in currency issued. A 50.5% jump in current accounts and overnight deposits held by banks and other financial corporations at the Central Bank of the UAE partly offset these moves. The shift suggests an active optimisation of liquidity buffers by banks within a tighter base-money environment.
Payments activity remained high. The cumulative value of domestic fund transfers through the UAE Funds Transfer System reached AED9.384 trillion in the first four months of 2026, with AED2.723 trillion processed in April alone. The Central Bank’s gold holdings also increased by about 2% during April to AED40.816 billion.
For investors, the data point to a banking system that still expands balance sheets and credit, with strong retail and GRE dynamics, even as the monetary base contracts and deposit sources rotate. The next signals to watch will be whether private-sector deposit growth can continue to outpace loan expansion and how funding costs and asset quality evolve if this phase of tighter liquidity persists.
