UAE banks post higher profits as business conditions improve – News

Analysts and banking experts say rising oil prices and rising interest rates will lead to stronger profitability for UAE banks in 2022-23



UAE banks performed well despite geopolitical challenges, global recession fears, inflation fears and economic slowdown in major economies. — File photo

Published: Thu 28 Jul 2022, 07:50 PM

Major banks in the United Arab Emirates posted strong first-half 2022 profits on Thursday as business sentiment improves in the country despite geopolitical challenges, global recession fears, inflation fears and economic slowdown of major economies.

First Abu Dhabi Bank (FAB), the largest lender in the United Arab Emirates, announced a 50% increase in its first-half net profit to 8 billion dirhams despite increased volatility in the global market.

Hana Al Rostamani, group CEO at FAB, said nearly 50 billion dirhams of net additional loans had been granted by the bank since the start of the year, which is a record for the group for a half-year period.

Dubai‘s largest bank, Emirates NBD, posted its highest first-half profit since 2019 when it posted a net profit of 11% to 5.3 billion dirhams. The bank’s second-quarter profits were exceptionally strong at 3.5 billion dirhams, reflecting 42% year-on-year growth.

In line with the two major lenders, the UAE’s third-largest bank, Abu Dhabi Commercial Bank, also reported a 21% increase in first-half net profit to 3.059 billion dirhams, supported by higher interest rates. high and non-interest income.

Net profit at Dubai-based, Sharia-compliant lender Emirates Islamic soared 23% to 701 million dirhams on higher funded and unfunded income, supported by a significant reduction in the cost of risk.

United Arab Bank, a Sharjah-based lender, also posted 209% growth in net profit in the first half, with profits rising to 83.3 million dirhams between January and June 2022, from 26.9 million dirhams. during the corresponding period last year.

Analysts and banking experts said liquidity conditions in the UAE are more favorable, helped by modest loan growth, and this has benefited the banking sector. They said rising oil prices and rising interest rates will lead to stronger profitability for UAE banks in 2022-23.

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