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UAE largest banks’ profitability to remain resilient in 2020 - Moody's

UAE largest banks’ profitability to remain resilient in 2020 - Moody's
Profitability of the UAE’s four largest banks will be resilient
DIB
DIB
0.34% 5.86 0.02
Emirates NBD
EMIRATESNBD
0.58% 17.40 0.10
ADCB
ADCB
0.24% 8.42 0.02

FAB
NBAD
0.00% 13.40 0.00

UAE – Mubasher: The profitability of the UAE’s four largest banks will likely remain resilient in 2020, benefitting from the strong public-sector loan growth, according to a recent report by Moody's Investors Service (Moody's)

First Abu Dhabi Bank (FAB), Emirates NBD, Abu Dhabi Commercial Bank (ADCB), and Dubai Islamic Bank (DIB) reported a 13% increase in their combined net profits to AED 37 billion ($10.1 billion) in 2019, the report showed.

The report referred that by the end of December 2019, the four banks represented 73% of total banking assets in the UAE.

The assistant vice president-analyst at Moody's, Mik Kabeya, commented: "We expect the banks' profitability to remain resilient in 2020, with a net income to tangible assets ratio at around 1.8%. Non-interest income accounted for 30% of operating income in 2019 and will remain solid, given the sizeable portion of relatively resilient foreign exchange and credit card related income."

Higher public sector lending together with acquisitions raised credit growth by 13%, offsetting a drop in net interest margins during the second half of 2019.  For the full-year 2019, the total net interest income of the four banks increased by 6%.