UAE banks’ investments hit $210.8b as credit and deposits grow

By Vriti Gothi

Banks operating in the United Arab Emirates have maintained a strong upward trajectory in investments, credit, and deposits, highlighting the sector’s sustained resilience and its capacity to support the nation’s evolving economic landscape.

The latest data released by the Central Bank of the UAE (CBUAE) shows that total banking investments reached $210.8 billion by the end of April 2025, marking a significant 16.2% increase compared to April 2024 and a 1.4% rise from the previous month.

Debt securities continue to form the backbone of UAE banks’ investment strategies, reaching $ 352.4 billion by the end of April. This segment remains attractive due to its stable returns and relatively lower risk profile, which aligns with the sector’s prudent approach to asset allocation. Meanwhile, securities held to maturity accounted for $94.15 million, further demonstrating banks’ preference for instruments that provide predictable income streams over longer periods.

In a sign of increasing appetite for diversification, UAE banks have also expanded their exposure to equities and other asset classes. Investments in stocks stood at $5.2 billion, while other investment instruments totalled $15.4 billion. This balanced allocation reflects banks’ efforts to manage risk while pursuing growth opportunities across different market segments.

Beyond investments, the UAE banking sector’s lending activity remains robust. Total bank credit surpassed $615 billion by the end of April, registering an annual growth rate of 9.5%. Domestic credit continued to dominate, accounting for $512 billion, while foreign credit reached $103 billion. This solid credit growth underscores the sector’s role in financing economic development and supporting businesses and households across the UAE.

Strong deposit growth has further strengthened the sector’s liquidity position. Total bank deposits exceeded $807 billion at the end of April. Of this, resident deposits comprised $732 billion, reaffirming the confidence of local depositors in the banking system. Non-resident deposits contributed $75 billion, highlighting the UAE’s position as a trusted financial hub for international clients seeking stability and attractive returns.

A regional breakdown of the figures indicates Abu Dhabi’s banks continue to lead in terms of total investments, with $111 billion deployed across various instruments. Dubai’s banks followed closely, reporting investments of $80 billion, while other emirates contributed a combined $18 billion. This regional spread demonstrates the strength and competitiveness of banking institutions across the country’s key financial centres.

The sustained expansion of investments, credit, and deposits points to the UAE banking sector’s strong fundamentals, underpinned by prudent regulatory oversight, healthy capital buffers, and a forward-looking approach to innovation and digital transformation. As the nation continues to position itself as a leading regional financial hub, banks are likely to further leverage emerging technologies, diversify their portfolios, and tap into new segments to drive long-term growth.

With a stable macroeconomic outlook and ongoing reforms to attract global capital and talent, the UAE banking industry is well-placed to play a pivotal role in financing strategic sectors and supporting the government’s broader economic diversification agenda under its national development strategies.