ECONOMY

Largest UAE banks report H1 2019 net profit growth

First Abu Dhabi Bank (FAB), Emirates NBD, Abu Dhabi Commercial Bank (ADCB), and Dubai Islamic Bank (DIB) saw a combined 16 percent increase in year-on-year profits. (File photo: Reuters)

The UAE’s four biggest banks increased their combined H1 2019 net profit by 19 billion dirhams ($5.3 billion), according to a report published on Wednesday.

First Abu Dhabi Bank (FAB), Emirates NBD, Abu Dhabi Commercial Bank (ADCB), and Dubai Islamic Bank (DIB) saw a combined 16 percent increase in year-on-year profits.

The report, published by credit ratings agency Moody’s Investors Service, pointed to asset growth and strong non-interest income as the factors behind net profit increase.

In addition, Emirates NBD’s partial disposal of a stake in Network International, a payment processing company, also skewed the results. Excluding the sale of the bank, year-on-year profits for the four banks increased only three percent.

FAB, Emirates NBD, ADCB, and DIB account for over two-thirds of UAE banking sector assets.

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

The ratings agency said that it expects full-year profitability to decline to 1.7 percent, from 1.8 percent in 2018. Technology investments and expansion-related spending will likely be responsible as they cause increases in operating expenses in 2019. Banks’ provisioning charges will likely also increase as pressure in the property, hospitality and retail segments continues amid a soft non-oil economy, Moody’s added.
 

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Last Update: Wednesday, 7 August 2019 KSA 14:27 - GMT 11:27
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