Fresh CBUAE data shows a banking system with rising liquidity, larger deposits, and stronger credit activity. Total bank assets reached AED5.47 trillion by late February, adding further weight to recent expansion. Credit also moved upward during the month, with private sector borrowing providing the clearest support. Deposit growth stayed broad, with residents and non-residents both adding fresh balances. Those changes matter because funding, lending, and liquidity often move together during stronger banking periods.
Money supply measures also pointed upward across the main aggregates during February 2026. The narrow gauge, M1, rose as cash outside banks and transaction deposits both increased. The broader gauge, M2, also climbed after a strong rise in quasi-monetary balances. Corporate balances gave the largest support within that broader measure during the month. Household balances also rose strongly, showing firmer savings and demand deposit activity. Deposits from government-related entities added support, while financial corporations also recorded notable gains. M3 increased too, even with a drop in government sector deposits during February.
That mix suggests liquidity stayed healthy even while one public deposit category moved lower. For readers tracking the UAE money supply, February delivered another sign of broad financial expansion. The rise in the monetary base added another positive signal for underlying banking conditions. Reserve balances, currency issuance, and overnight account balances all moved upward during the month. A decline in bills and Islamic certificates softened overall growth, yet did not reverse direction.
UAE banking sector assets gain support from liquidity and deposits
The balance sheet story looked stronger once lending figures entered the picture. Total gross credit reached AED2.63 trillion by the end of February, extending January’s advance. Most of that increase came from domestic credit, which expanded by AED20.6 billion. Private sector borrowing gave the largest boost, showing continued demand from companies and business activity. Lending to government-related entities also increased, though at a smaller pace overall. Credit to the government sector fell again, trimming part of the wider domestic increase. Even so, gross credit growth stayed positive because private demand outweighed the public sector decline.
Deposit figures reinforced the same picture across the funding side of bank balance sheets. Total bank deposits reached AED3.40 trillion by late February, posting a solid monthly increase. Resident balances accounted for most of that move, while overseas balances also rose nicely. Within resident funds, private sector deposits made the largest contribution by a wide margin. Government-related entities and other financial corporations also added support through moderate monthly increases. Government sector balances moved lower, though those declines failed to offset broader private inflows. From my standpoint, this pattern points to confidence from firms, households, and institutional depositors.
These details matter because rising deposits often give banks more room to support lending needs. They also show where activity sits inside the system, with private money playing a larger role. CBUAE data for February, therefore, paints a clear and practical picture for readers. UAE banking sector assets rose alongside stronger funding, healthier liquidity, and broader private participation. The combined increase in UAE money supply, private sector deposits, and monetary base UAE measures supports that view. With gross credit growth still led by private borrowers, February ended with solid momentum across UAE banks.