Islamic banks operating in the UAE have achieved remarkable performance by the end of 2025, with their total asset portfolio reaching approximately 1.15 trillion dirhams. This represents an annual growth of nearly 16%, equating to an increase of 250 billion dirhams compared to 2024.
The sector continues to solidify the UAE’s position as the second-largest market in the Gulf for Islamic banking, in terms of assets, investments, deposits, and financing activities.
Islamic banks demonstrated the highest asset growth among UAE banks, expanding by 21.5%, in contrast to a 16% growth rate for conventional banks. Over the past year, Islamic banks added around 170 billion dirhams in new assets, increasing their portfolio from 795 billion dirhams at the end of 2024 to over 965 billion dirhams by December 2025.
Regarding local investments, data from the Central Bank of the UAE indicated an 11% growth, adding 17 billion dirhams to reach 175 billion dirhams, compared to 158 billion dirhams at the end of 2024. This reflects investor confidence in the sustainable performance of Islamic banks and their efficiency in managing investments.
The credit and deposit activities also witnessed growth, with Islamic credit surpassing a 22.4% annual increase, adding 109 billion dirhams and bringing the total Islamic credit balance to 598 billion dirhams.
The local private sector was the primary beneficiary of Islamic financing, accounting for 64% of the total, receiving new funding worth 48 billion dirhams in 2025. As a result, the cumulative credit balance increased from 384 billion dirhams to over 432 billion dirhams.
In terms of deposits, Islamic banks recorded the highest growth rate among UAE banks, exceeding 26% with an addition of around 148 billion dirhams. The total deposits rose from 569 billion dirhams at the end of 2024 to 717 billion dirhams by the end of 2025.
Resident deposits constituted 98% of total deposits, with a cumulative growth of 25.5%, increasing from 560 billion dirhams to 702 billion dirhams.