According to the CBUAE report, Islamic banks also witnessed a yearly increase of 3.5 percent in credit by the end of January, to 396.9 billion dirhams.

The report further noted that deposits in Islamic banks increased to 434.1 billion dirhams in January 2023, an annual increase of 3.1 percent, compared to nearly 421 billion dirhams in January 2022, news agency WAM reported.

The total investments in Islamic banks also witnessed a 20.1 percent year-on-year rise to 106 billion dirhams.

On April 19, Dubai Islamic Bank, the UAE’s biggest Shariah-compliant lender by assets, reported a net profit rise of 11 percent in the first quarter of 2023, compared to the same period in the previous year.

The bank revealed that its net profit for the first quarter hit 1.47 billion dirhams.

“The UAE’s economy continues to expand at a fast rate supported by high energy prices, increasing business trade and activities and the return of tourism which has boosted domestic retail spending,” said Mohammed Al Shaibani, chairman of DIB.

He added: “The banking sector remains well-insulated from the global contagion and continues to be on a solid footing with steady growth in their balance sheets and rising profitability levels with DIB closing the first quarter of the year with very strong and remarkable set of results.”

These developments in the UAE come at a time when the emirate is witnessing strong economic growth despite global economic headwinds.

After growing 7.6 percent in 2022, the highest in 11 years, the UAE economy is expected to expand 3.9 percent this year and 4.3 percent in 2024, the CBUAE said in March.

Business activity in the UAE’s non-oil private sector also expanded at the strongest pace in five months in March, while employment grew at the fastest rate since 2016, a recent Purchase Managers' Index report from S&P Global revealed.

The latest S&P Global report suggested that UAE’s PMI rose to 55.9 in March, from 54.3 in February.