UAE banks’ profits surge 35% to $4.98bn in Q1: report

UAE banks’ profits surge 35% to $4.98bn in Q1: report

RIYADH: The UAE’s banking sector recorded a 35 percent growth in net profits to 18.3 billion dirhams ($4.98 billion) during the first quarter of 2023, reported global professional services firm Alvarez & Marsal.

This boost in profitability resulted from improved cost efficiencies, lower impairment charges, and increased non-core income.

“This has been a very strong quarter for the UAE banks. We expect that for the balance of the year, the UAE banking sector will maintain the gains of the first quarter,” said Asad Ahmed, managing director and head of the Middle East financial services at Alvarez & Marsal, in a statement.

He added that the banks’ net interest margins remained stable at 2.8 percent in the first quarter.

“Stable NIMs, improving cost efficiencies, and lower impairments have led to record profits for the UAE banks in the current quarter, although we witnessed a mixed performance by some banks on the margin front.”

NIM reveals the amount of money a bank earns in interest on loans compared to the amount it pays in interest on deposits. It is one of the indicators of a bank’s profitability and growth.

Amid monetary tightening, the banking sector recorded a 6.2 percent growth in deposits and a 2 percent rise in