Net income of UAE banks rises 5.6% to $5.5bln in Q3 – Alvarez & Marsal
- Date: 23-Nov-2023
- Source: Zawya
- Sector:Financial Services
- Country:UAE
Net income of UAE banks rises 5.6% to $5.5bln in Q3 – Alvarez & Marsal
The total net income for UAE banks increased by 5.6% quarter-on-quarter (QoQ) to 20.3 billion dirhams ($5.53 billion) in the third quarter of 2023 on higher net interest income (NII), Alvarez & Marsal (A&M) said in its latest banking report.
NII grew strongly by 5.5% QoQ on higher rates, while total interest income rose 11.4% QoQ. All the banks reported an increase in NII except Abu Dhabi Islamic Bank (ADIB), which recorded a decline of 1.3% QoQ.
Furthermore, net income was supported by an 11.7% QoQ decline in the impairment charges for the July to September period.
According to the report, deposits grew faster, by 3.9% QoQ, compared to a growth of 2.4% QoQ for loans and advances. However, the share of current account savings account (CASA), which is low-cost deposits, declined to 49.5% in Q3 2023 from 50.3% in Q2 2023.
The Central Bank of the UAE (CBUAE) increased interest rates in line with the US Federal Reserve with a hike of 25 basis points in Q3 2023.
“With inflation still above the target levels, we expect rate cuts only after mid-2024," the report said, adding, "We believe net interest margins of the UAE banks will remain stable for