UAE Bad-Loan Ratio Hits Series Low of 2.3% as Dubai Banks Lead Credit Growth

Lending grew fast without hurting asset quality. Gross loans, which include interbank loans, reached AED 3.252 trillion, up 16.1% from AED 2.800 trillion a year earlier. Emirates 24|7, reporting the same release, put the growth in bank credit at 17.3% to Dh2.9 trillion. Non-performing loans fell to AED 73.2 billion from AED 88.6 billion.

Bank assets hit a record AED 5.815 trillion. Total regulatory capital rose above AED 701 billion, up from AED 629 billion a year earlier.

Capital grew more slowly than the loan book. Risk-weighted assets rose to AED 4.129 trillion from AED 3.619 trillion. The total capital ratio was 17.0%, down from 17.4% a year earlier and flat on June. The Tier 1 ratio was 15.8% and the common equity Tier 1 ratio 14.4%.

Liquidity buffers were thinner than a year ago. The liquidity coverage ratio stood at 134.6%, against 149.4% in September 2025, though it edged up from 133.7% in June. Liquid assets were 14.2% of total assets, compared with 16.4% a year earlier. The net stable funding ratio was 111.4%.

Provisions covered 55.3% of non-performing loans, against 56.6% a year earlier. Net non-performing loans after provisions fell to 4.7% of capital from 6.1%.

Profitability eased slightly. Return on assets, measured over the trailing 12 months, was 2.0%, down from 2.2% a year earlier. Return on equity was 14.7%, against 15.0%. Trailing 12-month net income after tax was AED 95.8 billion. The central bank marks the third-quarter figures as preliminary and subject to revision.

Dubai's banks accounted for a large share of the growth. Their combined assets and investments approached AED 3 trillion at the end of September, Al Bayan reported, citing central bank data. Assets alone rose 11.3% to AED 2.6 trillion, while investments rose 18.4% to nearly AED 400 billion.

Credit extended by Dubai banks rose 19.2%, or AED 214 billion, to AED 1.326 trillion, according to the newspaper. The private sector took 57% of that lending and grew 15.6%. Deposits at Dubai banks rose 10.5% to AED 1.644 trillion, giving the emirate's lenders more than 46% of customer deposits held in UAE banks.

The figures cover a quarter in which the Iran war weighed on regional trade and business confidence. Fitch Ratings, in its latest review of the UAE sovereign, said banks look resilient under its base case for the conflict, supported by sound metrics and ample liquidity and capital.