A. SREENIVASA REDDY (ABU DHABI)
The gross value of assets held by UAE banks stood at Dh5.340 trillion at the end of December 2025, marking a 1.7% month-on-month increase from Dh5.252 trillion at the end of November, according to the Central Bank of the UAE (CBUAE).
The increase in total banking assets reflected continued expansion across key balance-sheet items. Gross credit rose 1.5% month on month to Dh2.570 trillion at the end of December, compared with Dh2.533 trillion a month earlier. Nearly two-thirds of the credit growth was driven by lending in foreign currencies, which expanded by Dh25. 8 billion, while the remainder came from an increase of Dh11.6 billion in domestic credit.
Within domestic credit, lending to the private sector increased by 0.6%, while credit extended to government-related entities rose by 1.8%. Credit to other financial corporations (OFCs) rose by 10.9%. This growth was partly offset by a decline in credit to the government sector, which had a negative contribution to overall domestic credit growth during the month.
Bank deposits increased 2.2% to Dh3.307 trillion at the end of December, up from Dh3.237 trillion in November. The rise was driven by growth in resident deposits, which climbed 1.3% to Dh3.009 trillion, alongside a sharper 12.2% increase in non-resident deposits to Dh298 billion.
Among resident deposits, private sector deposits rose 2.8% to Dh2.250 trillion, while deposits of government-related entities increased 4.8% to Dh296 billion. Deposits of other financial corporations expanded 12.9% to Dh70 billion, whereas government sector deposits declined 10.4% to Dh393 billion by the end of the month.
On the monetary aggregates front, the M1 money supply increased 2.2% to Dh1.072 trillion at the end of December, supported by a 1.9% rise in currency in circulation outside banks and a 2.3% increase in monetary deposits.
The broader M2 aggregate rose 3.2% to Dh2.755 trillion, driven mainly by a Dh62 billion increase in quasi-monetary deposits, with corporate sector deposits accounting for the largest share of the monthly expansion.
Meanwhile, M3 money supply increased 1.2% to Dh3.255 trillion, reflecting the growth in M2, although the expansion was partly moderated by an 8.5% decline in government sector deposits, largely in foreign currency time deposits.
The monetary base expanded 5.4% to Dh896 billion at the end of December, compared with Dh850 billion a month earlier. According to the CBUAE, the increase was driven primarily by a 1.9% rise in currency issued and a sharp 63.4% increase in banks’ and OFCs' current accounts and overnight deposits at the central bank.
These increases more than offset a 9.1% decline in reserve accounts, while monetary bills and Islamic certificates of deposit remained broadly unchanged during the month.