UAE top banks’ profits, margin levels ‘take a hit’ in Q1

UAE top banks’ profits, margin levels ‘take a hit’ in Q1

The country’s 10 largest listed banks are First Abu Dhabi Bank (FAB), Emirates NBD (ENBD), Abu Dhabi Commercial Bank (ADCB), Dubai Islamic Bank (DIB), Mashreq Bank (Mashreq), Abu Dhabi Islamic Bank (ADIB), Commercial Bank of Dubai (CBD), National Bank of Fujairah (NBF), National Bank of Ras Al-Khaimah (RAK) and Sharjah Islamic Bank (SIB), according to leading global professional services firm Alvarez & Marsal (A&M), which has released its latest UAE Banking Pulse for Q1 2022.

The report suggests that the Q1’22 results for most of the banks in the UAE highlighted an increase in profitability, despite lower non-interest income. The loans and advances (L&A) for the top ten banks in the UAE increased by 2.8% quarter on quarter (QoQ) as the economic environment improved.

LDR increases

The UAE Banking Pulse for Q1’22 noted that the loan-to-deposit ratio (LDR) increased to 84.5% in Q1’22 compared to 82.1% in Q4’21. The aggregate non-interest income (NII) increased by 0.6% QoQ as the overall net interest margin (NIM) remained flat at 2.1%, due to low benchmark rates.

Asset quality of the state-owned banks improved as non-performing loans (NPL) / L&A fell by 0.1% points to 6.1% during the quarter.

A&M’s UAE Banking Pulse examines data of the 10 largest