The United Arab Emirates banking sector expanded further in May 2026, with gross assets rising 1.1% month on month to AED5.633 trillion, equivalent to about $1.53 trillion. Growth was supported by stronger domestic lending, higher reserve balances at the central bank and increased deposits from non-residents and financial institutions.
Gross credit rose by AED12.3 billion to AED2.733 trillion, although the increase was uneven. Domestic credit expanded by AED13.8 billion, more than offsetting a modest decline in foreign credit. Corporate borrowers, individuals and government-related entities all contributed to the rise in local lending.
Key Overview
- Gross banking assets rose 1.1% to AED5.633 trillion.
- Gross credit increased 0.5% to AED2.733 trillion.
- Domestic credit grew by AED13.8 billion during May.
- Corporate and individual credit each increased by AED4.6 billion.
- Total bank deposits reached AED3.463 trillion.
- Bank reserve balances jumped 49.4% to AED295.4 billion.
- Broad money supply, measured by M3, stood at AED3.393 trillion.
Banking Assets Add AED63 Billion in One Month
Gross assets held by UAE banks increased from AED5.570 trillion at the end of April to AED5.633 trillion at the end of May, according to the official monthly banking report released in July.
The AED63 billion monthly increase lifted the sector’s asset base to approximately $1.53 trillion. That dollar equivalent reflects the UAE’s fixed exchange-rate framework, under which the dirham is maintained at roughly AED3.672 to AED3.673 per US dollar.
May’s increase followed the more moderate expansion recorded in April, when banking assets had risen 0.2% to AED5.570 trillion. The continued rise indicates that balance-sheet growth remained resilient heading into the middle of 2026.
Domestic Lending Drives Credit Expansion
Gross credit increased by AED12.3 billion, or 0.5%, from AED2.721 trillion in April to AED2.733 trillion in May. This extended the lending growth reported in the April banking update, when credit had expanded by AED25.2 billion.
Domestic credit was the main driver in May, rising by AED13.8 billion. Credit to companies and individuals each increased by AED4.6 billion, while financing for government-related entities rose by AED3.5 billion, or 1%.
Foreign credit moved in the opposite direction and ended the month at AED562.5 billion. Its decline reduced the overall contribution from lending outside the UAE, but it was not large enough to offset domestic growth.
The composition of the increase suggests that credit demand remained broad rather than being concentrated in a single borrower category. Higher corporate borrowing can support business investment and working capital, while growth in individual credit may reflect continued demand for mortgages, personal finance and other household products.
Deposits Continue to Support Bank Funding
Total bank deposits stood at AED3.463 trillion at the end of May. The deposit base remained substantially larger than gross credit, giving banks an important source of domestic and international funding as lending expanded.
Non-resident deposits increased 3.6% to AED318.6 billion. Deposits from resident other financial corporations also rose 2.4% to AED67.2 billion, contributing positively to the monthly change.
The rise in non-resident deposits may indicate continued international confidence in UAE banks and the country’s role as a regional financial centre. However, foreign deposits can also be more sensitive to changes in global liquidity and investor sentiment than stable domestic retail balances.
Contemporary reporting similarly described deposit growth alongside lending as an important feature of the May data.
Context is everything. Stay ahead of shifting trends with today’s market updates, and uncover emerging opportunities using the Serrari Group Market Index and Marketplace. Then, take control of your own financial future by exploring our Money & Life Reset Transformation Blueprint ™ to build stronger habits, create better systems, and design a path toward lasting wealth.
Bank Reserves Rise Sharply as Liquidity Strengthens
The monetary base stood at AED848.5 billion at the end of May. Within that total, bank reserve balances held with the central bank rose 49.4% to AED295.4 billion.
Reserve balances are used by banks for regulatory, settlement and liquidity-management purposes. A sharp monthly increase can reflect changes in deposits, central-bank operations and financial flows through the banking system.
The report does not attribute the increase to a single cause. Even so, higher reserve balances provide evidence that liquidity held directly within the central-bank framework strengthened during the month.
Money Supply Measures Remain Elevated
The narrowest measure of money supply, M1, reached AED1.054 trillion. This comprised AED167.6 billion in currency circulating outside banks and AED885.9 billion in monetary deposits.
M2 stood at AED2.854 trillion, supported by an increase in dirham-denominated quasi-money deposits to AED1.135 trillion. M3, the broadest measure reported, reached AED3.393 trillion after government-sector deposits increased to AED539.5 billion.
Rising monetary aggregates generally indicate that more money is circulating or held in readily accessible deposits across the economy. Their effect depends on how the liquidity is used, including whether it supports productive investment, consumer spending, asset purchases or precautionary savings.
Strong Growth With External Risks Still in View
The May figures show a banking system continuing to expand across assets, credit, deposits and reserves. Domestic lending growth and a larger deposit base provide support for further economic activity, while elevated reserve balances strengthen the sector’s liquidity position.
The main risks lie outside the headline growth figures. Banks must maintain credit quality as lending expands, while changes in global interest rates, capital flows and regional conditions could affect funding and borrower performance.
For now, the May report points to sustained momentum. The next test will be whether asset and credit growth remain balanced with deposit expansion, prudent underwriting and stable liquidity through the second half of 2026.
Sources: Central Bank of the UAE / WAM / Khaleej Times
Your financial future isn’t something you wait for—it’s something you build.
The real question is: when do you begin?
Move beyond simply staying informed.
Navigate the markets with clarity—track trends through the Serrari Group Market Index, uncover opportunities in the Serrari Marketplace, and build practical knowledge with our Curated Wealth Builder Platform.
Stay connected to what truly matters.
Get daily insights on macro trends and financial movements across Kenya, Africa, and global markets—delivered through the Serrari Newsletter.
Growth opens doors.
Advance your career through professional programs including ACCA, HESI A2, ATI TEAS 7 , HESI EXIT , NCLEX – RN and NCLEX – PN, Financial Literacy!🌟—designed to move you forward with confidence.
See where money is flowing—clearly and in real time.
Track Money Market Funds, Treasury Bills, Treasury Bonds, Green Bonds, and Fixed Deposits, alongside global and African indexes, key economic indicators, and the evolving Crypto and stablecoin landscape—all within Serrari’s Market Index.
