UAE bank lending climbs Dh72.4b in a month to Dh2.87t

UAE bank lending surged by Dh72.4 billion ($19.7 billion) in August, reaching a total of Dh2,871.4 billion ($781.9 billion), according to the Central Bank of the UAE (CBUAE). This represents a 2.6 percent increase in a single month. The report, released on October 5, highlights that personal borrowing led to domestic credit growth, which expanded by 2.8 percent to Dh2,268.8 billion.

External credit added 1.6 percent, amounting to Dh602.6 billion. Notably, lending to individuals grew by 5.6 percent, accounting for 1.6 percentage points of the overall credit expansion. Corporate lending, while growing at a slower pace of 2.4 percent, contributed an additional Dh22.8 billion to the increase. Government borrowing also rose by 2.8 percent, or Dh7.2 billion, adding 0.3 percentage points to the domestic credit growth.

Deposits saw a 0.7 percent rise, from Dh3,509.8 billion in July to Dh3,534.8 billion in August. Resident deposits increased by 1.0 percent to Dh3,229.3 billion, while non-resident deposits remained steady at Dh305.5 billion. The government's deposits within the resident category experienced the largest jump, growing by 3.5 percent to Dh461.1 billion.

Private sector deposits saw a modest 0.7 percent increase to Dh2,361.5 billion. Each sector collectively contributed 0.5 percentage points to the overall growth. The monetary base expanded by 4.2 percent to Dh825.9 billion. The central bank's liquidity, including current accounts of banks and other financial corporations and banks' overnight deposits at the CBUAE, surged by 66.9 percent, reaching Dh156.1 billion.

Currency issued grew by 1.1 percent to Dh184.0 billion. The money supply, M1, which comprises currency in circulation outside banks and monetary deposits, totaled Dh1,038.9 billion at the end of August. Currency in circulation outside banks accounted for Dh162.6 billion, and the rest is made up of monetary deposits at Dh876.3 billion.

The broader M2, which includes M1 and quasi-monetary deposits, increased by 0.7 percent to Dh2,919.9 billion ($795.1 billion). Corporate deposits rose by 1.4 percent, contributing 0.7 percentage points to this growth. M3, which includes M2 and government deposits at banks operating in the UAE, along with those at the Central Bank, grew by 0.7 percent to Dh3,465.6 billion ($943.7 billion).

Corporate deposits contributed 0.6 percentage points to this growth, while government sector deposits added 1.0 percentage point, reaching Dh545.7 billion ($148.6 billion). Gross bank assets rose by 1.3 percent to Dh5,741.3 billion ($1.56 trillion). UAE banks reported a profit of Dh90.8 billion, with assets reaching Dh5.3 trillion.