What Q1 financial results of top four banks say about UAE’s banking sector?

What Q1 financial results of top four banks say about UAE’s banking sector?

Dubai: Most of the leading banks in the UAE have declared their first quarter 2021results pointing to improving operating conditions. While year on year profit gains have been modest at best for most banks, they have made significant gains over the previous quarter and other preceding quarters. Clearly, the Q1 numbers are pointing to improvement in the economic conditions leading to improved non-interest incomes, gains in cost savings and significant reduction in loan loss provisions supporting profitability. Although the first quarter numbers indicate a small improvement in loan growth, interest incomes continued to be under stress due to the low interest rate environment, somewhat offset by savings from lower cost of funds. First Abu Dhabi Bank (FAB), the UAE's largest bank, reported a Q1 group net profit of Dh 2. 5 billion, up 3 per cent year on year. While the bank made significant gains from 36 per cent lower provisions year on year, operating expenses were reduced by 3 per cent as the group maintained strong cost discipline and gains. At the close of the quarter non-performing loans (NPL) ratio was at 4 per cent, provision coverage at 96 per cent. "FAB's strong foundations and competitive strengths continue to