UAE banks to post net profit surge for 12-18 months

UAE banks to post net profit surge for 12-18 months

Record surge driven by both higher interest and non-interest income

As the UAE economy remained resilient, net interest income surged 37 per cent year-over-year. Photo for illustrative purposes only. — KT file

Published: Wed 23 Aug 2023, 7:28 PM

The four largest UAE banks – First Abu Dhabi Bank, Emirates NBD Bank, Abu Dhabi Commercial Bank, and Dubai Islamic Bank — which together accounted for 77 per cent of banking assets as of March 20232 – reported a combined net profit of $7.4 billion in the first six months, up from $4.4 billion for the same period of 2022.

Predicting that bottomline profitability will increase further this year, Moody’s Investors Service said high-interest rates and business activity, along with increasing operating costs and steady provisions, will continue to support net profits going forward.

The record surge in net profit was driven by both higher interest and non-interest income, as business activity remained strong, analysts at Moody’s said.

Alvarez & Marsal said in its Banking Pulse report that strong capitalisation, and robust performance of UAE tourism and real estate sectors leave banks in the UAE well placed to weather any macroeconomic challenge. The report illustrates a positive trend in the UAE banking sector’s profitability, primarily driven by