Ten UAE banks recently disclosed their results for the fourth quarter of 2017 and the full year 2017, posting an overall positive performance despite the challenges seen during the year.
These 10 banks recorded a combined net profit of AED 8.26 billion ($2.25 billion) in Q4-17, registering an increase of 12% or AED 858.91 million from AED 7.4 billion ($2.02 billion) in the same period of 2016, data compiled by Mubasher showed.
The positive results indicate a recovery in financials and success in the reduction of expenses and provisions, which are necessary under the Basel III standards, which require banks to maintain high liquidity levels, analysts told Mubasher.
First Abu Dhabi Bank (FAB) recorded the highest profits having posted AED 2.82 billion in Q4-17, down 1% year-on-year, and made up 34.22% of the 10 banks’ results for the period.
Emirates NBD came in second with AED 2.175 billion in profits in the final quarter of 2017, up 17% year-on-year, and represented 26.34% of these banks’ profits.
Coming in third place was Dubai Islamic Bank (DIB) with a 25% year-on-year profit increase to AED 1.14 billion, and accounting for 14% of the total, followed by Abu Dhabi Commercial Bank (ADCB) with 1.07 billion in profits between October and December and with 13% of the total profits.
Annual results rise 8%
As for the full-year 2017, these 10 banks logged a combined net profit of AED 32.40 billion ($8.82 billion), up 8% from AED 29.92 billion ($8.15 billion) in 2016.
FAB also topped the list, although its profits fell 4% to AED 10.94 billion in 2017 on the back of lower operating revenues and higher merger costs.
Emirates NBD and DIB maintained the second and third positions, respectively, after their annual profits grew 15% each to AED 8.345 billion and AED 4.32 billion, respectively.
UAE banks’ results and their upcoming dividend distributions are positive for investors, particularly those of DIB and Emirates NBD, analyst Waddah Al Taha stated.
The results were mostly in line with forecasts despite the central bank raising interest rates thrice during 2017, which hiked costs and pressured banks’ profit margins and credit, the analyst told Mubasher.
He noted that banks attempted to confront this pressure through other financial means such as trimming administrative expenses.
UAE banks also worked on meeting Basel III standards, which require higher liquidity, Al Taha noted, indicating that banks were likely to bolster their capital in the coming period through issuing bonds or sukuk or through mergers to meet the tough liquidity requirements.