UAE Banks Step Up Resilience Drive As Sector Assets Top Dh5.3T

(MENAFN- Khaleej Times) The UAE Banks Federation (UBF) has reaffirmed its commitment to strengthening the resilience, stability and future readiness of the country's financial system, as banking leaders aligned closely with new initiatives from the Central Bank of the UAE to safeguard growth momentum amid heightened global uncertainty.

At its first quarterly meeting of 2026, the UBF CEOs Advisory Council - chaired by Abdulaziz Al Ghurair - reviewed sector performance and endorsed the Central Bank's Comprehensive Financial Institution Resilience Package, describing it as a critical framework to strengthen liquidity buffers, digital infrastructure and risk-management capabilities across the banking ecosystem.

Recommended For You

Al Ghurair said the UAE banking sector continues to demonstrate exceptional strength supported by proactive regulation, strong capitalisation and accelerating digital transformation.

“Guided by the leadership's vision and supported by advanced strategies and policies, the UAE has consolidated its position as a leading financial and banking hub,” he said.“The Comprehensive Financial Institution Resilience Package reflects the Central Bank's commitment to ensuring stability and enabling the sector to continue driving socio-economic development.”

The endorsement comes as the UAE banking system enters 2026 from one of its strongest balance-sheet positions in years. Total banking assets rose to about Dh5.34 trillion by the end of 2025, marking an increase of more than Dh780 billion over the year, while deposits climbed to roughly Dh3.3 trillion, reflecting sustained confidence among residents and international investors.

Credit expansion also remained robust, with total bank lending reaching approximately Dh2.57 trillion in 2025, driven by stronger financing to the private sector, government-related entities and strategic industries supporting economic diversification.

Sector fundamentals remain equally strong. The banking system's capital adequacy ratio stood around 17.3 per cent in 2025, well above regulatory requirements, while the net non-performing loan ratio remained contained at about 1.7 per cent, underscoring asset-quality resilience.

Analysts say these buffers position UAE banks among the most resilient in emerging markets. Ratings agencies including Fitch have highlighted continued loan growth and strong deposit inflows as key strengths supporting stability, while international institutions note that the system maintains ample capital and liquidity cushions to absorb potential external shocks.

The CEOs Advisory Council also welcomed progress under the Central Bank's Financial Infrastructure Transformation programme, particularly the rollout of advanced platforms such as Aani instant payments, Jaywan domestic card scheme, Nebras open finance architecture and Central Bank Digital Currency infrastructure.

Participants said the launch of Takamul - a specialised artificial intelligence and big-data analytics company supporting financial infrastructure - represents a major step forward in strengthening operational resilience and accelerating digital innovation across the sector.

“These initiatives represent a qualitative leap in the UAE's digital financial architecture and reinforce the sector's readiness for the next phase of innovation-driven growth,” Al Ghurair added.

The council stressed that cybersecurity and fraud prevention remain top priorities as digital banking adoption accelerates. Banks across the UAE are increasing investments in advanced monitoring systems, real-time transaction analytics and awareness campaigns to safeguard customers and maintain trust in digital channels.

Trust continues to be one of the defining strengths of the national banking ecosystem. The UAE retained its global leadership ranking in the Customer Trust Index for banking services in 2025 for the third consecutive year, reflecting strong governance frameworks and customer-centric innovation.

Jamal Saleh, director general of UBF, said the federation is intensifying coordination with regulators and member banks to ensure the system remains agile amid global economic shifts.

“Our banking and financial sector continues its growth and development trajectory, further cementing its leading position,” Saleh said.“This reflects the effectiveness of the Central Bank's strategies in supporting stability and reinforcing the UAE's position as a global financial hub.”

He added that UBF's technical committees are working closely with stakeholders to expand SME financing, strengthen sustainability-linked lending, advance Emiratisation targets and enhance governance standards across the sector.

The council also praised the role of the Central Bank board, chaired by Sheikh Mansour bin Zayed Al Nahyan, in guiding regulatory reforms that reinforce institutional resilience while supporting innovation in payments, open finance and digital currency infrastructure.

With banking investments exceeding Dh774 billion and sector profitability indicators such as return on equity approaching 19 per cent across leading lenders, analysts say the UAE's financial system is entering a new phase of expansion anchored in diversification, technology adoption and strong regulatory oversight.

UBF leaders said as the UAE accelerates its transition toward a knowledge-driven economy, the banking sector will continue playing a central role in financing infrastructure, trade, green investment and private-sector growth - reinforcing the country's reputation as one of the world's most stable and forward-looking financial centres.

MENAFN12042026000049011007ID1110972587