The aggregate net income of the 10 largest lenders in the UAE grew more than 24 per cent in the first quarter of 2022, compared with the previous three months, according to professional services company Alvarez & Marsal.
The cumulative net income includes the Dh2.8 billion ($769.4 million) gain recorded by First Abu Dhabi Bank on the sale of its stake in Magnati. Excluding that one-off boost, aggregate net profit declined 2.6 per cent quarter-on-quarter, the consultancy said in its 2022 first-quarter UAE Banking Pulse report.
Most top-10 banks in the UAE reported a rise in profitability in the first quarter, despite lower interest income, as the Arab world’s second-largest economy continued to recover from the coronavirus-pandemic-driven slowdown.
Banks are set for a further boost in profitability in the coming quarters, said the company best known for its restructuring work.
“Rising oil prices, supportive government policies, revival signs in the real estate sector and normalising non-oil activity are expected to accelerate the UAE’s economy in the next quarter,” Asad Ahmed, managing director and head of Middle East financial services at A&M, said.
The UAE economy posted strong growth last year and has carried the growth momentum into 2022. The Emirates' non-oil economy expanded an annual 7.8 per cent in the fourth quarter of 2021, the Central Bank of the UAE said in its Quarterly Economic Review.
In March, Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, on Twitter said the country's economy grew 3.8 per cent in 2021, above the World Bank's 2.1 per cent estimate. The International Monetary Fund expects the UAE's economy to expand 4.2 per cent in 2022.
Banks in the Emirates are also expected to benefit from rising interest rates. The US Federal Reserve earlier this month raised interest rates by 50 basis points, a move mimicked by the CBUAE.
UAE lenders' net income is estimated to increase 15 per cent and return on assets to grow 1.4 per cent, for every 100 bps increase in interest rates, according to S&P Global Ratings.
“We anticipate domestic lending to grow on the back of revived economic activities, and NIM [net interest margin] to improve as benchmark interest rates have increased by 50 basis points,” Mr Ahmed said.
“Deposits are also expected to grow, underpinned by the projected interest rate increase.”
Rising oil prices, supportive government policies, revival signs in the real estate sector and normalising non-oil activity are expected to accelerate the UAE’s economy in the next quarter
Asad Ahmed,
managing director and head of Middle East financial services, A&M
The survey covered the UAE’s top 10 banks by assets – First Abu Dhabi Bank, 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.
The aggregate loans and advances of these lenders increased 2.8 per cent quarter on quarter. Loans-to-deposit ratio increased to 84.5 per cent from 82.1 per cent in the last quarter of 2021.
The cumulative non-interest income increased 0.6 per cent on a quarterly basis as the overall net interest margin remained flat at 2.1 per cent.
Asset quality of banks also improved as non-performing loans fell by 0.1 percentage points to 6.1 per cent during the quarter. However, there are potential asset quality risks in the second half of the year, when the CBUAE ends its targeted economic support scheme, the report said.
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Company%20Profile
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The Bio
Favourite holiday destination: Either Kazakhstan or Montenegro. I’ve been involved in events in both countries and they are just stunning.
Favourite book: I am a huge of Robin Cook’s medical thrillers, which I suppose is quite apt right now. My mother introduced me to them back home in New Zealand.
Favourite film or television programme: Forrest Gump is my favourite film, that’s never been up for debate. I love watching repeats of Mash as well.
Inspiration: My late father moulded me into the man I am today. I would also say disappointment and sadness are great motivators. There are times when events have brought me to my knees but it has also made me determined not to let them get the better of me.
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants
Cryopreservation: A timeline
- Keyhole surgery under general anaesthetic
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Company Profile
Company name: OneOrder
Started: October 2021
Founders: Tamer Amer and Karim Maurice
Based: Cairo, Egypt
Industry: technology, logistics
Investors: A15 and self-funded
UAE currency: the story behind the money in your pockets
The candidates
Dr Ayham Ammora, scientist and business executive
Ali Azeem, business leader
Tony Booth, professor of education
Lord Browne, former BP chief executive
Dr Mohamed El-Erian, economist
Professor Wyn Evans, astrophysicist
Dr Mark Mann, scientist
Gina MIller, anti-Brexit campaigner
Lord Smith, former Cabinet minister
Sandi Toksvig, broadcaster
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
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- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
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What can you do?
Document everything immediately; including dates, times, locations and witnesses
Seek professional advice from a legal expert
You can report an incident to HR or an immediate supervisor
You can use the Ministry of Human Resources and Emiratisation’s dedicated hotline
In criminal cases, you can contact the police for additional support
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6.30pm: Dubai Millennium Stakes Group Three US$200,000 (Turf) 2,000m; Winner: Ghaiyyath, William Buick (jockey), Charlie Appleby (trainer).
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THE SPECS
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Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
