November 2023 saw an 0.8 per cent increase in size of UAE banking assets, closing at Dh4.02 trillion. Image Credit: Shutterstock

Dubai: Assets held by the UAE banking sector have topped the Dh4 trillion mark for the first time, according to data from the UAE Central Bank.

The regulator’s November 2023 Monetary and Banking Developments Report disclosed a 0.8 per cent monthly increase in banking assets, including bank acceptance certificates, and thus reaching Dh4.02 trillion, up from Dh3.99 trillion in October.

Total bank credit witnessed a 1per cent increase, amounting to Dh 1.99 trillion by November end compared to Dh1.97 trillion in October. This included a 0.8 per cent increase in domestic credit and a notable 2.8 per cent increase in foreign credit.

The Central Bank attributed the domestic credit growth to a rise in demand from various sectors, with public sector credit increasing 5 per cent, private sector by 2 per cent, and credit to non-bank financial institutions by 6 per cent.

There was also a substantial growth in total bank deposits, reaching Dh2.44 trillion end November. Resident deposits grew by 0.4 per cent, driven by a 1.9 per cent increase in private sector deposits, while those from non-bank financial institutions remained steady.

The monetary base expanded significantly, increasing by 2.9 per cent from Dh596.9 billion in October to Dh614 billion a month later. This was marked by a 3.5 per cent rise in issued currency and a 19.1 per cent increase in banks and financial institutions' current accounts and overnight deposits with the Central Bank. Additionally, cash bills and Islamic certificates of deposit saw a 1.1 per cent increase.

The total money supply (N1), which includes cash in circulation outside banks and cash deposits, reached Dh797.4 billion. Despite a decline in cash deposits by Dh 4.9 billion, there was increased cash circulation outside banks by about Dh3 billion.

The report also noted an increase in N2 money supply (which is N1 and quasi-cash deposits). This increased 0.7 per cent from Dh 1.92 trillion at the end of October to Dh 1.93 trillion, mainly due to a Dh15 billion increase in quasi-cash deposits.

The N3 money supply - which includes N2 plus government deposits in banks operating in the UAE and with the Central Bank - grew 0.5 per cent from Dh 2.37 trillion to Dh 2.389 trillion.