Banks across UAE posted strong profits despite local and international factors dictating the country’s banking sector. The trend is only expected to continue. Experts predict the UAE bank’s profits are likely to reach Dh40 billion for the whole year after taking into account factors such as Fed rate cut and Abu Dhabi’s fiscal stimulus.
According to an expert, UAE banks are expected to maintain first-half figures of 2019 for the remainder of the year, which would take yearly profit of the UAE banks to Dh40 billion. The UAE banks are expected to make profits because of increased cost-cutting in non-core segments and further consolidation in the banking space.
The combined net profits of 18 UAE national banks increased by 16.6 percent to Dh24.5 billion in the first half of 2019, compared to Dh21 billion in the same period of 2018. The 11 banks listed on the Abu Dhabi Securities Exchange recorded a 3.5 increase in profits which amounts to Dh11.6 billion.
Dubai-based Emirates NBD posted the highest profit which came to Dh7.5 billion in the first six months of the year. In the first six months of 2018, the bank posted profits of Dh5 billion. In Abu Dhabi, First Abu Dhabi Bank was the biggest earner with profits of Dh6.33 billion in the first half of the year.
According to M.R. Raghu, head of research at the Kuwait Financial Centre, aggregate profits of the Emirati banks is likely to increase by 5 to 6 percent in the second half of 2019.
Similarly, the Islamic banking sector is also showing growth with an increase in demand for Shariah-compliant products among both Muslim and non-Muslim customers.