|07 August, 2019

UAE’s four largest banks post H1 profit above $5bln

First Abu Dhabi Bank PJSC, Emirates NBD, Abu Dhabi Commercial Bank and Dubai Islamic Bank account for over two-thirds of the UAE's banking sector assets.

First Abu Dhabi Bank head office situated at Khalifa Business Park in Abu Dhabi. Image used for illustrative purpose.

First Abu Dhabi Bank head office situated at Khalifa Business Park in Abu Dhabi. Image used for illustrative purpose.

First Abu Dhabi Bank/ Handout via Thomson Reuters Zawya

The UAE's four biggest banks reported first-half net profits rose to Dh19 billion ($5.3 billion), helped by asset growth and strong non-interest income, as well as a one-time gain at one of the banks, Moody's Investors Service said in a new report.

First Abu Dhabi Bank PJSC, Emirates NBD, Abu Dhabi Commercial Bank and Dubai Islamic Bank account for over two-thirds of the UAE's banking sector assets. A large one-time gain from Emirates NBD's partial disposal of a stake in payment processing company Network International contributed to the banks' combined 16 per cent increase in year-on-year profits. Excluding that gain, profits rose by 3 per cent.

"The banks' combined net interest income increased slightly, buoyed by solid lending growth," said Mik Kabeya, AVP-analyst at Moody's. "And non-interest income rose materially on foreign-exchange trading revenue and increased investment banking activity."

Moody's expects full-year profitability to decline to a still sound 1.7 per cent, from 1.8 per cent in 2018. Operating expenses will increase owing to technology investments and expansion-related spending. Provisioning charges will increase owing to pressure in the property and hospitality sector, and in the retail segment, amid a soft non-oil economy. – TradeArabia News Service

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