The assets in fully-fledged Islamic banks in the UAE have shown an increase of 5 percent in 2020, representing around 19 percent of the total banking system assets, according to a financial stability report by the Central Bank of UAE. But, on the other hand, it was also mentioned that assets of Islamic Windows in conventional banks decreased by 2.4 percent, which accounts for a total of 5 percent of banking system assets.
The Islamic financial sector of the UAE comprises fully-fledged Islamic banks, Islamic windows, and Islamic finance companies, have total assets of $213 billion. Out of these, 17 conventional banks with Islamic windows saw their asset size reach 166.2 billion dirhams in 2020.
The report also mentioned that 11 Islamic finance companies in the UAE accounted for 55 percent or 17.6 billion dirhams of total assets of the finance companies’ sector in 2020. The report also mentioned that the strong growth in the Islamic financial sector is reflected by a compounded annual growth rate over the last five years of 5.6 percent.
The assets of the Islamic banks mainly comprise financing, which accounts for about 65 percent of the total assets. Investments account for 11 percent and the remaining part was made up of balances at the central banks, interbank financing, and other assets. While the financing portfolio mainly recorded private corporate and retail financing, it was also observed that financing to the government reached 22 percent of the total in 2020. Islamic banks in the UAE are primarily domestically funded where the citizens deposit about 93 percent of the total money.