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The AED 13.5 billion in loan repayments that the Central Bank of the UAE allowed banks to defer at the start of the regional conflict begins coming due this month and next. EnterpriseAM reported that these deferrals, granted under the central bank’s March resilience package without triggering a default classification, cover more than 135,000 customers. The program more than doubled in size between May and July, with the six-month clock on the earliest cohort now running out.
The UAE banking sector has continued to report strong performance metrics through the conflict period. Ten of the largest listed banks recorded net income of AED 24.7 billion in the second quarter of 2026, marking a 2.7 percent rise from the prior quarter according to Alvarez & Marsal’s UAE Banking Pulse report. The aggregate non-performing loan ratio held steady at a historic low of 2.3 percent.
Stage 3 impaired loans expanded by just 0.7 percent quarter on quarter, resulting in their share declining to 2.5 percent from 2.6 percent. Cost of risk dropped to 0.35 percent from 0.56 percent, largely due to recoveries led by Mashreq, Dubai Islamic Bank and Emirates NBD, EnterpriseAM data shows. Analysts have noted that the persistently low NPL levels reflect in part the regulatory forbearance that has prevented reclassification of the deferred facilities.
Restructuring a loan through payment deferral would ordinarily prompt a shift out of Stage 1 under standard accounting rules. The CBUAE’s wartime deferrals permitted banks to forgo this step. By comparison the 2020 pandemic support package went further by suspending any requirement for banks to revisit those classifications, according to the EnterpriseAM assessment.
The resilience package rolled out in March 2026 in response to exceptional regional circumstances triggered by the conflict. The National reported in May that more than 65,000 customers had availed themselves of initial deferrals, interest relief and fee waivers amounting to Dh6.2 billion. Sectors including hospitality, transport, tourism and entertainment accounted for the largest share of the support.
Banks maintained lending continuity to priority areas throughout the deferral window. The program’s expiration will now oblige lenders to evaluate borrower repayment capacity without the earlier regulatory shield in place. EnterpriseAM observed that all bank results published since the conflict began have incorporated this form of official backing.
