The UAE's banking system closed 2025 on a high note, with total assets climbing 17.1 percent to reach AED5.3 trillion, according to the Central Bank of the UAE's newly released Financial Stability Report 2025.
The findings paint a picture of a sector growing stronger on nearly every front, from lending activity to profitability and asset quality.
Loan portfolios expanded by 17.8 percent over the year, with domestic lending to retail customers and private corporates driving much of the growth. At the same time, banks continued to clean up their books, with the non-performing loan ratio falling to 3.3 percent, down sharply from 4.7 percent in 2024 and a marked improvement on the 8.2 percent recorded back in 2020.
Profitability also saw a notable jump, with net profits rising 11.7 percent to AED90.8 billion, buoyed by stronger operating income and healthy deposit growth. Capital buffers remained comfortably above regulatory thresholds too, with the Capital Adequacy Ratio holding at 17.0 percent.
The central bank's 2025 stress tests reinforced this picture of resilience. Even under a severe adverse scenario, the average Common Equity Tier 1 capital ratio, while dipping to a low of 11.1 percent from 14.1 percent, stayed above minimum regulatory requirements throughout the test horizon.
Beyond banking, the report pointed to continued stability across the insurance sector and Islamic finance, alongside progress in the UAE's financial infrastructure under the Financial Infrastructure Transformation Programme. Payment systems such as Aani and the Jaywan national card scheme featured prominently, reflecting ongoing efforts to modernise cross-border and domestic payments.
CBUAE Governor Khaled Mohamed Balama said the findings reflect the system's capacity to keep supporting the national economy, while affirming the regulator's commitment to strengthening supervisory frameworks to manage future risks and safeguard long-term financial stability.
News Source: Emirates News Agency
