UAE Islamic banks’ assets exceed $190bn in 2023

By the close of 2023, the UAE’s Islamic banks exceeded 700 billion dirhams ($190.6 billion) in assets for the first time, data released by the central bank showed. According to the Central Bank of the UAE, Islamic banks’ assets grew to 703 billion dirhams, marking an annual increase of 11 percent from 630.7 billion dirhams in December 2022.

This represents a growth of 72.4 billion dirhams over the course of 12 months.

The data revealed that credit extended by Islamic banks rose to 428.9 billion dirhams by December, up 7.82 percent annually from 397.8 billion dirhams in December 2022. Deposits in Islamic banks saw a substantial increase, reaching 495.3 billion dirhams by December, reflecting an annual growth of about 12.6 percent from 439.8 billion dirhams in December 2022.

Islamic banks’ total investments stood at 132.7 billion dirhams by December, showing an annual increase of 27.1 percent or 28.3 billion dirhams compared to December 2022’s 104.4 billion dirhams.

The breakdown of Islamic banks’ investments included 100.4 billion dirhams in bonds held to maturity, 18.7 billion dirhams in financial instruments representing debt on others, 2.6 billion dirhams in shares, and 11 billion dirhams in other investments.

Traditional banks operating in the UAE also witnessed substantial growth in their total assets, reaching 3.3 trillion dirhams by December, up 11 percent annually from 3 trillion dirhams in December 2022, marking an increase of 335.2 billion dirhams over the year. Conventional banks accounted for approximately 82.7 percent of the total assets of the country’s banking system by December, amounting to 4 trillion dirhams, while Islamic banks held a 17.3 percent share. Total credit extended by conventional banks reached 1.5 trillion dirhams by December, marking a yearly increase of 5.5 percent from 1.4 trillion dirhams in December 2022. Deposits in conventional banks also experienced significant growth, reaching 2 trillion dirhams by December, reflecting an annual growth rate of 13.7 percent from 1.7 trillion dirhams in December 2022. The total investments of conventional banks grew by 15.6 percent annually to 488.8 billion dirhams by December, with 246.2 billion dirhams in financial instruments representing debt on others, 204.4 billion dirhams in bonds held to maturity, 13.2 billion dirhams in shares, and 37.9 billion dirhams in other investments.