The top 10 UAE banks have reported a significant rebound in quarterly profits for Q2, according to the latest Banking Pulse report from global professional services firm Alvarez & Marsal (A&M) - which suggests lenders benefitted from an increase in profitability driven by core interest income.
Total interest income of the banks grew drastically by 19.5% quarter-on-quarter. These major banks reported an increase in aggregate net income of 24.4% to AED12.6bn (about $3.4bn).
A&M said that the rise in interest income was spurred by a sharp rise in both advances and deposits. Total advances grew by 1.8% while deposits grew faster at 4.5%.
Aggregate non-interest income rose by 15.1% quarter-on-quarter. And the overall net interest margin increased by 26.1 bps over the same period due to higher benchmark rates. Overall asset quality improved as non-performing loans/ loans and advances fell by 0.4% to 5.7% percent during the quarter.
A&M's UAE Banking Pulse examines data of the 10 largest listed banks in the UAE using 16 different metrics. The report assesses their performance across areas including size, liquidity, income, operating efficiency, risk, profitability, and capital.
The banks included in the coverage are: First Abu Dhabi Bank (FAB), Emirates NBD (ENBD), Abu Dhabi Commercial Bank (ADCB), Dubai Islamic Bank (DIB), Mashreq Bank (Mashreq), Abu Dhabi Islamic Bank (ADIB), Commercial Bank of Dubai (CBD), National Bank of Fujairah (NBF), National Bank of Ras Al-Khaimah (RAK) and Sharjah Islamic Bank (SIB).
