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UAE banks are rolling out attractive interest rates on new and existing deposits to strengthen their retail funding base, Reuters reported on June 10. Dubai Islamic Bank is marketing up to 6.6 percent annually for customers who open accounts in dirhams or dollars between June 1 and August 31, transfer at least 10,000 dirhams monthly in salary and maintain a minimum average balance of 50,000 dirhams. Emirates NBD is providing up to 5 percent per annum on its Saver Plus accounts for new funds deposited between April 1 and June 30. National Bank of Fujairah is offering up to 6.25 percent on new dirham savings accounts opened before July 31 with regular salary deposits, rates that sit well above the central bank’s 3.65 percent base rate.
The central bank told Reuters that the new offers represent normal market activity aimed at attracting retail deposits and supporting lending. Fadi Zoghby, a Dubai-based partner at McKinsey, said the conflict may have increased the value of stable retail deposits for banks. Zoghby added that the timing is notable but he would not call this a sudden war-driven deposit scramble.
Zoghby told Reuters the offers form part of an existing competitive trend driven by pressure from digital lenders that has prompted banks to craft tailored packages designed to make them a customer’s primary bank rather than engage in a generic race for deposits. Tech-savvy digital upstarts with lower overhead costs are challenging the market position of established lenders across the UAE. The central bank has responded to reduced business activity linked to the Iran war and Strait of Hormuz closure by expanding banks’ access to reserve balances and funding facilities in both dirhams and dollars.
Central Bank of the UAE figures show total resident and non-resident deposits climbed 4.3 percent quarter-on-quarter to 3,446 billion dirhams in the first quarter of 2026, with resident deposits rising 4.4 percent to 3,138.8 billion dirhams. Government and government-related entities contributed nearly 70 percent of first-quarter deposit inflows, according to Bank of America analysts, while government deposits expanded 14.7 percent year-on-year to 446.8 billion dirhams in April. An Alvarez & Marsal review of the ten largest listed banks found aggregate deposits grew 3.8 percent quarter-on-quarter even as lending advanced at a faster 5.8 percent pace.
Bank of America analysts reported that UAE banks’ liquidity indicators deteriorated somewhat between March and early May yet showed no signs of stress. The banking sector’s surplus liquidity held at the central bank stood at 181 billion dirhams as of June 9, the UAE central bank said. The chairman of the UAE Banks Federation dismissed concerns about potential outflows or dollar shortages and stated he expected second-quarter figures to prove better than those recorded in the first three months.
Alvarez & Marsal data placed the sector’s return on equity at 18.7 percent and return on assets at 2.0 percent for the first quarter, with net income rising 11.1 percent quarter-on-quarter despite a marginal easing in net interest margin to 2.37 percent. The UAE central bank described the banks as demonstrating strong resilience in prudential ratios including liquidity and capital during these unusual times. McKinsey’s Zoghby cautioned against linking central-bank backstops directly to the deposit campaigns, noting that system-level support does not replace the need for each bank to maintain a durable funding franchise.
