PHOTO
The UAE's biggest banks, which account for 77% of banking assets, notched up a combined net profit of $7.4 billion in H1 2023, up 68% from $4.4 billion for the same period of 2022.
According to Moody's Investors Service, the higher profits at the four largest banks, First Abu Dhabi Bank (FAB), Emirates NBD Bank, Abu Dhabi Commercial Bank (ADCB) and Dubai Islamic Bank PJSC (DIB), driven by both higher interest and non-interest income, as business activity remains strong.
Interest rates and increased business volumes, as the UAE economy remains strong, drove net interest income up 37% year-over-year, the ratings agency said in a note on Wednesday.
"Interest income growth outweighed funding cost growth, as low-cost current and savings accounts remained a big contributor to the banks' funding, driving net interest margins (NIM) up to 2.4% for H1 2023 from 1.9% a year earlier."
Combined non-interest income rose 41%, driven by large gains in trading and fee-generating activity, which grew 11%, contributing 31% of the four banks' overall operating profit.
The four banks' combined impairment charges were stable and below pandemic levels, the report noted.
(Writing by Brinda Darasha; editing by Seban Scaria)
