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The UAE's major banks have posted significant growth in earnings on the back of better asset quality, improved profitability and margins, according to Alvarez & Marsal (A&M).
The consulting firm's latest Banking Pulse report said that the top ten lenders in the country saw their net income rise by 24.4% to AED12.6 billion ($3.4 billion) during the second quarter of the year.
A&M had reviewed the performance of the UAE's major banks, which include First Abu Dhabi Bank (FAB), Emirates NBD, Abu Dhabi Commercial Bank, Dubai Islamic Bank, Mashreq Bank, Abu Dhabi Islamic Bank, Commercial Bank of Dubai, National Bank of Fujairah, National Bank of Ras Al Khaimah and Sharjah Islamic Bank.
A&M said banks' earnings have been supported by higher interest income and an improvement in customers' "personal economic standing".
The banks' combined interest income jumped by 19.5% compared to the previous quarter.
Advances and deposits rose by 1.8% and 4.5%, respectively, while aggregate non-interest income (NII) increased by 15.1% compared to the previous quarter.
Overall net interest in margin (NIM) surged by 26.1 bps due to higher benchmark rates.
Overall asset quality improved, as non-performing loans (NPLs), loans and advances dropped by 0.4% to 5.7% during the same period.
The top ten banks also saw customer deposits growth outpacing loans and advances. Loan-to-deposit ratio (LDR) fell to 82.4% from 84.5%.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
