The UAE's top-10 listed banks have improved their quarter-on-quarter performance in the first three months of this year as costs declined and liquidity is expected to remain healthy for the rest of 2018, according to global consultants Alvarez & Marsal.
“In terms of liquidity, this quarter saw similar growth in both deposits and loans and advances. This resulted in a stable loan to deposit ratio, with nine out of the 10 banks in the ‘sweet spot’ with what is typically considered to be a healthy amount of liquidity,” Saeeda Jaffar, managing director of for financial institutions advisory services practice, Alvarez & Marsal said in report released on Sunday.
The drivers for the increase in return on equity are threefold: lower operating costs, a decrease in cost of risk, driven by a significant decline in provisioning, and an increase in leverage of the banks’ balance sheets, she added.
GCC banks are forecast to see rising profits in 2018 due to lower costs and a stabilising macroeconomic environment. The banks are expected to see slight recovery in loan growth, driven by the corporate segment, and an improvement in spreads quarter-on-quarter, Egyptian investment bank EFG Hermes said in a report last week.
Alvarez & Marsal’s said it used market data and 16 different metrics to assess key performance areas including size, liquidity, income, operating efficiency, risk, profitability and capital of the lenders - First Abu Dhabi Bank, Emirates NBD, Abu Dhabi Commercial Bank, Dubai Islamic Bank, Mashreq Bank, Abu Dhabi Islamic Bank, Union National Bank, Commercial Bank of Dubai, National Bank of Ras Al-Khaimah, and the National Bank of Fujairah.
Commercial Bank of Dubai reported a 68 cent rise in its first-half net income as operating expenses and impairment charges for bad loans declined while net interest and fee income climbed.
Net profit for the six-month period to the end of June, climbed to Dh561 million, the lender said in a statement on Wednesday to Dubai Financial Market, where its shares are traded. Income for the second quarter, surged 63 per cent to Dh281.3m, the lender said in a separate bourse filing.
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Read more:
UAE banks less profitable in Q4 as costs trump income, Alvarez & Marsal says
GCC bank profits showed resilience in 2017 even as revenues fall sharply
UAE Banks Federation chief sees higher loan growth, profitability in 2018
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The report noted that the net interest margin declined, despite a rise in yield on credit, driven by an increased cost of funds. Five of the top-10 banks witnessed a decrease in their net interest margins during the first quarter, it added.
Return on equity, one of the main measures to gauge the financial health of an institution, and return on assets both increased during the three-month period to the end of March as cost of risk decreased along with operating expenses.
“This came at the expense of a decrease in capital adequacy ratio. Nine out of 10 banks showed an increase in ROE,” the consultancy said in the report.
Cost to income ratio for the 10 surveyed UAE banks improved, falling from 34.2 per cent for the three-month period ending December 31 to 32.3 per cent at the end of the first quarter. A decrease in operating expenses of 45 basis points, drove the improvement, Alvarez & Marsal said.
The cost of risk for the lenders also fell significantly from 1.04 per cent in the fourth quarter of the last year to 0.81 per cent in the first three months of 2018 due to a fall in loan loss provisions, it noted.
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
Wicked
Director: Jon M Chu
Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
if you go
The flights
Etihad and Emirates fly direct from the UAE to Seoul from Dh3,775 return, including taxes
The package
Ski Safari offers a seven-night ski package to Korea, including five nights at the Dragon Valley Hotel in Yongpyong and two nights at Seoul CenterMark hotel, from £720 (Dh3,488) per person, including transfers, based on two travelling in January
The info
Visit www.gokorea.co.uk
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
%20Ramez%20Gab%20Min%20El%20Akher
%3Cp%3E%3Cstrong%3ECreator%3A%3C%2Fstrong%3E%20Ramez%20Galal%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%3C%2Fstrong%3E%20Ramez%20Galal%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStreaming%20on%3A%20%3C%2Fstrong%3EMBC%20Shahid%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E2.5%2F5%3C%2Fp%3E%0A
The specs
Engine: 2.0-litre four-cylinder turbo
Power: 268hp at 5,600rpm
Torque: 380Nm at 4,800rpm
Transmission: CVT auto
Fuel consumption: 9.5L/100km
On sale: now
Price: from Dh195,000
Dirham Stretcher tips for having a baby in the UAE
Selma Abdelhamid, the group's moderator, offers her guide to guide the cost of having a young family:
• Buy second hand stuff
They grow so fast. Don't get a second hand car seat though, unless you 100 per cent know it's not expired and hasn't been in an accident.
• Get a health card and vaccinate your child for free at government health centres
Ms Ma says she discovered this after spending thousands on vaccinations at private clinics.
• Join mum and baby coffee mornings provided by clinics, babysitting companies or nurseries.
Before joining baby classes ask for a free trial session. This way you will know if it's for you or not. You'll be surprised how great some classes are and how bad others are.
• Once baby is ready for solids, cook at home
Take the food with you in reusable pouches or jars. You'll save a fortune and you'll know exactly what you're feeding your child.
UAE%20PREMIERSHIP
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Three ways to limit your social media use
Clinical psychologist, Dr Saliha Afridi at The Lighthouse Arabia suggests three easy things you can do every day to cut back on the time you spend online.
1. Put the social media app in a folder on the second or third screen of your phone so it has to remain a conscious decision to open, rather than something your fingers gravitate towards without consideration.
2. Schedule a time to use social media instead of consistently throughout the day. I recommend setting aside certain times of the day or week when you upload pictures or share information.
3. Take a mental snapshot rather than a photo on your phone. Instead of sharing it with your social world, try to absorb the moment, connect with your feeling, experience the moment with all five of your senses. You will have a memory of that moment more vividly and for far longer than if you take a picture of it.
UAE currency: the story behind the money in your pockets
Business Insights
- Canada and Mexico are significant energy suppliers to the US, providing the majority of oil and natural gas imports
- The introduction of tariffs could hinder the US's clean energy initiatives by raising input costs for materials like nickel
- US domestic suppliers might benefit from higher prices, but overall oil consumption is expected to decrease due to elevated costs
TOURNAMENT INFO
Fixtures
Sunday January 5 - Oman v UAE
Monday January 6 - UAE v Namibia
Wednesday January 8 - Oman v Namibia
Thursday January 9 - Oman v UAE
Saturday January 11 - UAE v Namibia
Sunday January 12 – Oman v Namibia
UAE squad
Ahmed Raza (captain), Rohan Mustafa, Mohammed Usman, CP Rizwan, Waheed Ahmed, Zawar Farid, Darius D’Silva, Karthik Meiyappan, Jonathan Figy, Vriitya Aravind, Zahoor Khan, Junaid Siddique, Basil Hameed, Chirag Suri
Mobile phone packages comparison
How the bonus system works
The two riders are among several riders in the UAE to receive the top payment of £10,000 under the Thank You Fund of £16 million (Dh80m), which was announced in conjunction with Deliveroo's £8 billion (Dh40bn) stock market listing earlier this year.
The £10,000 (Dh50,000) payment is made to those riders who have completed the highest number of orders in each market.
There are also riders who will receive payments of £1,000 (Dh5,000) and £500 (Dh2,500).
All riders who have worked with Deliveroo for at least one year and completed 2,000 orders will receive £200 (Dh1,000), the company said when it announced the scheme.
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