
With a sustainable economy, banking in UAE remains strong; thus, favorable economic conditions are enhancing asset quality. “UAE Banking Sector Outlook 2025” from S&P Global Ratings still sees the trend continuing positively in the upcoming years. It believes that UAE banks will keep solid capital reserves and maintain robust financial positions.
UAE Banking Sector Outlook 2025
Real GDP growth is likely to remain robust in 2025, supported by pro-business policies, low corporate taxes, streamlined visa processes, success of long-term residency programs, and support for new business ventures in the country.
The report further believes that lending activity will also be strong throughout 2025 due to positive monetary policies and a healthy economic environment.
For the past three years, customer deposits of the banks in the UAE have surged sharply and are likely to propel their growth further. But, though banks’ profitability will remain high, it is unlikely to touch the record levels achieved in 2023.
S&P Global Ratings commented that UAE banks are improving efficiency by reducing the number of physical branches, outsourcing jobs to cost-effective locations, and accelerating digital transformation. All these steps will help them to maintain low costs and profitability. Also, their funding structures remain robust with a solid base of customer deposits and minimum dependence on external borrowing.