The Islamic banking sector in the UAE has seen a significant increase in assets over the past year, with the latest statistics from the Central Bank of the UAE (CBUAE) revealing a substantial growth of AED86 billion ($23.41 billion) in the assets of Islamic banks. This surge brings the total assets of Islamic banks in the UAE to AED717.7 billion ($195.39 billion) at the end of February 2024, marking a 13.61 percent annual increase from the previous year.
One of the key drivers of this growth has been the rapid increase in deposits within Islamic banks, which reached AED509.4 billion at the end of February, reflecting a 15.8 percent annual increase compared to the previous year. This growth in deposits amounted to AED69.5 billion over the 12-month period, highlighting the strong confidence and trust that customers have in Islamic banking institutions.
In comparison, conventional banks in the UAE also experienced growth in their assets, with total assets reaching AED3.48 trillion at the end of February, up 11.7 percent from the previous year. Despite this growth, Islamic banks still hold a 17.1 percent share of the total banking assets in the country, showcasing the increasing prominence of Islamic finance in the UAE’s financial sector.
The remarkable growth of Islamic banks in the UAE has been a consistent trend, with data from March 2023 showing that Islamic banks surpassed AED700 billion ($190.57 billion) in assets for the first time. This growth has been driven by increases in assets, credit, deposits, and investments, solidifying the position of Islamic banks in the country’s financial landscape.
At the close of 2023, the assets of Islamic banks stood at AED703.1 billion ($191.42 billion), marking an impressive annual increase of 11.5 percent from the previous year. This growth continued into December 2023, with Islamic banks experiencing a monthly growth of 0.6 percent, adding AED4.2 billion in assets over the month.
Overall, the growth of Islamic banks in the UAE highlights the increasing popularity and success of Islamic finance in the country. With a strong focus on ethical and Sharia-compliant banking practices, Islamic banks are attracting a growing number of customers and investors, contributing to the overall growth and stability of the UAE’s financial sector.