The total assets of banks operating in the country, including accepted bank certificates, rose by 2.7% to surpass 4.87 trillion dirhams at the end of May, compared to 4.749 trillion dirhams at the end of April.
Credit
According to the Monetary and Banking Developments report for May released by the Central Bank of the UAE, total credit increased by 1.5% to reach 2.293 trillion dirhams at the end of May, up from 2.259 trillion dirhams at the end of April. This growth is attributed to an increase in domestic credit by 7.1 billion dirhams and foreign credit by 26.9 billion dirhams.
The rise in domestic credit was driven by a 2% increase in credit to the government sector and a 0.8% rise in credit to the private sector. Conversely, credit to public sector entities associated with the government decreased by 2.4%, while credit to non-bank financial institutions fell by 2.5%.
Deposits
Bank deposits surpassed 3 trillion dirhams, recording a growth of 1.8% to exceed 3.018 trillion dirhams at the end of May, compared to 2.965 trillion dirhams at the end of April. This increase is due to a 1.9% rise in resident deposits, amounting to 2.741 trillion dirhams, and a 0.6% increase in non-resident deposits, reaching 277.2 billion dirhams.
Within resident deposits, government sector deposits increased by 3.4%, private sector deposits rose by 1.9%, and deposits from government-linked entities grew by 1.3%, while deposits from non-bank financial institutions declined by 6.1%.
Money Supply
Regarding the money supply, M1 increased by 0.4%, exceeding 1.015 trillion dirhams at the end of May, due to a rise in cash deposits by 3.4 billion dirhams and a growth in cash in circulation outside banks by 0.3 billion dirhams.
The M2 money supply also witnessed a 1.6% rise to 2.474 trillion dirhams, supported by the growth in M1 and an increase in quasi-monetary deposits by 34.7 billion dirhams. Meanwhile, M3 increased by 1.7% to 2.948 trillion dirhams, driven by the growth in M2 and an increment in government deposits of 11.5 billion dirhams.
Monetary Base
The monetary base rose by 2.2% from 819 billion dirhams at the end of April to 836.7 billion dirhams at the end of May, due to an increase in issued currency by 2.1%, a 29.2% rise in reserve accounts, and a 3.1% growth in Islamic certificates of deposits and treasury bills, which outweighed the decline in current accounts of banks and other financial institutions and overnight deposits with the central bank, which dropped by 48.8%.
Central Bank Assets
Additionally, the foreign assets of the central bank increased to 939.1 billion dirhams at the end of May, compared to 937.5 billion dirhams at the end of April.
As of the end of May, these foreign assets comprised 407.4 billion dirhams in bank balances and deposits with foreign banks, 487 billion dirhams in foreign securities, and 44.7 billion dirhams in other foreign assets.
Central Bank Balance Sheet
The central bank’s balance sheet totaled 974.2 billion dirhams, distributed across liabilities and capital with 443.2 billion dirhams in current accounts and deposits, 298.5 billion dirhams in treasury bills and Islamic certificates of deposit, 168.7 billion dirhams in currency notes and coins issued, 19.7 billion dirhams in other liabilities, and a capital and reserves total of 44.2 billion dirhams.
In terms of assets, the central bank’s balance sheet showed 196.8 billion dirhams in cash and bank balances, 226.4 billion dirhams in deposits, 513.7 billion dirhams in investments, 0.5 billion dirhams in loans and advances, and 36.8 billion dirhams in other assets.