The UAE’s banking sector is expected to see a steady improvement in asset growth and pro tability in 2018 and 2019 thanks to improving economic fundamentals and a decline in provisions. Last year the UAE banking sector reported strong results with total assets surging 4% to AED 2.7 tr, making it the biggest banking sector in the Arab world. The sector also achieved 8% growth in combined pro ts to AED 38 bn. Return on assets for the UAE banks was 12.7% and return on equity was 10.7%. Banking sector liquidity remained strong last year with lending to stable resources ratio at 84%. Loans are expected to grow 5 to 6% compared to 4% in 2017. Net pro t growth is also expected to improve on last year due to improving asset quality and economic conditions.
UAE-based insurance companies are expected to achieve up to 70% increases in net pro ts during the fourth quarter of 2017 and throughout 2018. The net pro ts of 30 insurance rms listed on the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX) surged 80% year-on-year to AED 1.2 bn in the rst nine months of 2017 after the raising of insurance policy prices. The government decrees on the insurance policy, including Dubai government’s decree to mandate insurance for all of its residents, boosted the sector’s net pro t forecasts.