Photo Credit : WAM
The Central Bank of the UAE (CBUAE) has published its Financial Stability Report 2025, highlighting the continued strength and resilience of the country’s financial and banking system.
According to the report, the UAE banking sector benefited from strong economic performance, solid capital and liquidity levels, improved asset quality, and sustained growth in lending, deposits and profitability.
Total banking assets rose by 17.1 percent to AED5.3 trillion at the end of 2025. The sector’s loan portfolio increased by 17.8 percent, mainly due to stronger domestic lending across the retail and private corporate segments.
Asset quality also improved during the year. The ratio of non-performing loans declined to 3.3 percent, compared with 4.7 percent in 2024 and 8.2 percent in 2020.
Banks remained well capitalised, with the Capital Adequacy Ratio standing at 17 percent at the end of 2025, comfortably above the minimum regulatory requirements.
The sector also recorded higher earnings, with net profits increasing by 11.7 percent to AED90.8 billion. The growth was supported by an increase in total operating income, while continued deposit growth helped banks maintain strong liquidity levels.
Supervisory stress tests conducted in 2025 confirmed the banking system’s capacity to withstand severe economic and financial pressures. Under the adverse scenario, the average Common Equity Tier 1 capital ratio fell from 14.1 percent to a low of 11.1 percent during the testing period but remained above regulatory minimums.
The report also noted the resilience of Islamic banking and the insurance sector. It highlighted further progress in developing the UAE’s payment systems and financial infrastructure through the Financial Infrastructure Transformation Programme.
Key developments included Aani, the UAE’s instant payment platform, and Jaywan, the national card payment scheme. Advances in cross-border payment systems have also helped improve the efficiency and resilience of the country’s financial infrastructure while supporting digital transformation.
Khaled Mohamed Balama, Governor of the CBUAE, said the report confirmed the financial system’s ability to support the national economy efficiently, backed by adequate capital, strong liquidity and continued improvements in asset quality.
He added that the CBUAE would continue strengthening its supervisory and prudential frameworks to prepare the financial system for future risks, protect financial stability and support sustainable economic growth.
