Figures from the central bank show that since the beginning of 2008 personal loans have risen by 22 per cent, compared with deposits which have grown by only 15 per cent. In the same period, bank assets have grown by 14.5 per cent.

Total loans and advances in the UAE also grew by 22 per cent.

With official inflation at 10.1 per cent at the end of 2007 and interest rates currently at 2 per cent, it is becoming increasingly difficult for the banking sector to attract new deposits.

Total profit for the UAE banking sector, including foreign banks operating in the UAE, hit AED16bn ($4.36bn) for the first six months of the year, up from AED11.4bn in the first six months of 2007.