Four Fifths of the UAE’s June Credit Growth Went Abroad
UAE banks added AED 24.7 billion to gross credit in June 2026, roughly double May’s AED 12.3 billion increase. Almost all of it went outside the country.
Foreign credit rose AED 19.9 billion, or 3.5 percent on the month, to AED 582.4 billion. Domestic credit rose AED 4.8 billion, or 0.2 percent, to AED 2.175 trillion. Foreign lending therefore supplied approximately 81 percent of June’s credit growth, according to the Central Bank of the UAE’s Monetary and Banking Developments data for June, reported on 14 August.
The reversal is sharp. In May, domestic credit led, rising AED 13.8 billion.
| Indicator | June 2026 | Monthly change |
|---|---|---|
| Gross credit | AED 2.758trn | +AED 24.7bn |
| — Domestic credit | AED 2.175trn | +AED 4.8bn |
| — Foreign credit | AED 582.4bn | +AED 19.9bn |
| Total deposits | AED 3.473trn | +0.3% |
| — Non-resident deposits | AED 291.5bn | −8.5% |
| Gross bank assets | AED 5.594trn | −0.7% |
A monthly split inside a longer shift
The central bank’s Quarterly Economic Review supplies the longer arc. At end-March 2026 foreign credit stood at approximately AED 557 billion, having grown 50.1 percent year on year, against 14.4 percent growth in domestic credit.
Working forward from the central bank’s published gross credit of AED 2,334.3 billion at end-June 2025, The Edge estimates foreign credit was growing approximately 37.5 percent year on year by June 2026 and domestic credit approximately 13.9 percent. Those are our calculations rather than published figures — the monthly release reports month-on-month changes only — but they reconcile with the central bank’s own June 2025 total to within rounding.
Read that way, June did not accelerate the annual rate; it moderated from the first quarter’s exceptional pace. What June produced was an unusually concentrated monthly allocation toward foreign lending. Foreign credit now represents approximately 21 percent of the system’s gross loan book.
Within the domestic AED 4.8 billion, lending to individuals rose AED 6.8 billion — more than the entire domestic increase — contributing 0.3 percentage points to domestic credit growth. Lending to other financial corporations jumped 11.4 percent, credit to government-related entities rose 1.5 percent and government-sector credit rose 0.6 percent. Weakness elsewhere in the private-sector book offset part of those gains.
The deposit side
Total deposits rose 0.3 percent to AED 3.473 trillion. That headline conceals a split: resident deposits rose 1.2 percent to approximately AED 3.181 trillion, while non-resident deposits fell to AED 291.5 billion from AED 318.6 billion, a decline of roughly 8.5 percent that reverses May’s 3.6 percent rise.
One month does not make a withdrawal of foreign funding. The cleaner reading is that the funding mix tilted toward resident deposits in the same month the asset side tilted toward foreign credit.
Money supply was subdued. M1 fell to AED 1.040 trillion from AED 1.054 trillion as currency in circulation dropped to about AED 160 billion. M2 rose 0.8 percent to AED 2.877 trillion and M3 rose to AED 3.426 trillion.
The asset decline
Gross banking assets fell approximately 0.7 percent to AED 5.594 trillion from AED 5,633.1 billion, a decline of roughly AED 39 billion, after a 1.1 percent rise the previous month.
A monthly fall in aggregate bank assets is unusual in this series and sits oddly beside a doubling of credit growth, which means the movement must lie in some other asset category — reserves at the central bank, interbank positions or securities. We are not going to name which without the full bulletin in hand. The monthly decline should not be read as evidence of lending contraction; gross credit was expanding while something else on the balance sheet was being reduced.
What it means
One month of lending data cannot establish that UAE banks systematically prefer foreign risk-adjusted returns to domestic ones. Cross-border credit moves with syndicated facilities, regional financing demand and individual portfolio decisions.
The durable signal is the divergence in growth rates. Foreign credit expanding at roughly two and a half times the domestic pace, and now above a fifth of the total loan book, gives cross-border exposures rising weight in the system’s asset quality, geographic concentration and supervisory perimeter. The June fall in non-resident deposits is a reminder that the liability side carries the same question.
Sources
Central Bank of the UAE, Monetary and Banking Developments, June 2026, as reported 14 August 2026, and Quarterly Economic Review, June 2026. Year-on-year growth rates are calculations by The Edge Research Team derived from the central bank’s published June 2025 credit total.
