By: Mahmoud Gamal
Dubai – Mubasher: A number of the UAE-based banks have reported solid profits for the first quarter of 2019, overcoming major obstacles.
Net profits of these banks reached around AED 10.7 billion during the three-month period ended in March, up 11.3% year-on-year from AED 9.96 billion, according to Mubasher’s statistics.
The financial statements of around ten lenders listed on the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX) have shown an average growth in profits ranging from 2% to 97% in Q1-19, while other four banks posted a profit decline ranging from 5% to 40%.
Strong growth
Growth in the UAE’s banking sector is likely to near 12% by the end of 2019 amid the increasing interest and profit margins, managing director of asset management at Menacorp Tariq Qaqish told Mubasher.
This growth will continue to the end of the year on the back of major lenders such as First Abu Dhabi Bank (FAB), Dubai Islamic Bank (DIB), and Emirates NBD, Qaqish indicated.
FAB has topped banks in terms of profits as it recorded a net profit of AED 3.1 billion in Q1-19, up 4% year-on-year on the back of an increase in operating revenue that reached AED 4.9 billion.
Emirates NBD came in the second spot with a net profit exceeding AED 2.74 billion, rising 15% year-on-year due to higher operating revenue that hit AED 4.72 billion.
Meanwhile, DIB was ranked the third after achieving a net profit growth of 13.9% as compared to Q1-18, recording AED 1.34 billion.
Challenges
Qaqish highlighted that banks operating in the GCC nation currently face major challenges represented in provisions for doubtful debts which started to increase recently, noting that they would overcome these obstacles amid higher assets’ value.
Some banks suffer an increase in cost and the sector faces such obstacles with mergers such as the recent consolidation completed between Abu Dhabi Commercial Bank (ADCB) and Al Hilal Bank, he added, noting that these transactions are positive for cutting costs, but negative for shedding jobs in the sector.
Translated by: Mai Ezz El-Din
