By: Bedour El-Raie

Abu Dhabi – Mubasher: A total of 13 UAE national banks, listed on the Abu Dhabi Securities Exchange (ADX), have recorded growth of 12.5% to AED 12.70 billion ($3.46 billion) in the first six months of 2015, ignoring the cost of provisions, up from AED 11.3 billion ($3.08 billion) in the same period in 2014.

UAE banks have achieved strong financials during Q2-15, research firm Renaissance Capital said in its most recent report, adding that it adjusted its expectations and said that UAE banks will see an increase in loans over the next two years by an average of 7.1%-10.7%, based on the achieved financials.

The National Bank of Ras Al Khaimah (RAK BANK) is likely to see a decline in profits to AED 1.405 billion in 2015, compared to AED 1.455 billion in 2014, while revenues are projected to grow from AED 3.55 billion to AED 3.87 billion.

RAK Bank, the sixth largest bank in terms of market value on the ADX, posted a net profit increase of 2.2% in H1-15 to AED 716.2 million, up from AED 700.4 million in the same period in 2014. On the other hand, Commercial bank International (CBI) was the only decliner, plunging 92% to AED 8.80 million, down from AED 108.600 million in H1-14, due to a 75.5% surge in provisions.

Financials for ADX-listed banks clearly reflect the continued decline in provisions as well as stable spending and growth in net interest income, market analyst Waddah Taha told Mubasher, adding that the Abu Dhabi banking sector remains the top economic sector in the emirate in terms of net profit growth rates.

The rise in banks’ profits during H1-15 was mainly due to improved operating performance, which reflected positively on the rise in gross income, net profits, the analyst noted, adding that banks continued to diversify their revenue sources.

Meanwhile, in terms of Q2, the sector saw a slight rise of 1.4% to AED 6.066 billion, from AED 5.98 billion in Q2-14.

Gamal Aggag, general manager at Al Sharhan Stock Centre, commented that UAE banks’ profits have taken centre stage especially after the recent successive declines seen in the real estate sector and its general slowdown.

First Gulf Bank (FGB) accounted for the largest profit growth, adding 2.42% to AED 1.451 billion in Q2-15, up from AED 1.417 billion in the same period in 2014, whereas CBI posted a loss of AED 14.2 million during the period against a profit of AED 23 million in the corresponding period the year before.

Profits for the National Bank of Umm Al Qaiwain jumped 126% to AED 421 million in H1-15, compared to AED 186.32 million in the same period the year before, registering the highest rise in total profits among ADX-listed banks.

Financial statements for local banks showed an increase of 14% or AED 93.9 billion in loans given to customers reaching AED 764.626 billion by the end of the six-month period, compared to AED 670.728 billion in H1-14. Meanwhile, customer deposits grew 1.4% to AED 571.5 billion against AED 563.731 billion in the corresponding period of last year.

Deposits by the National Bank of Abu Dhabi (NBAD) accounted for 40% of total ADX-listed banks’ deposits, reaching AED 230 billion, registering a decline of 3.7% from AED 237.4 billion in H1-14. FGB came in second with AED 140.3 billion worth of deposits, up 2.04% from AED 137.5 billion the year before.

Provisions for Abu Dhabi banks edged up 0.34% to AED 2.53 billion in H1-15, up from AED 2.520 billion in the same period a year earlier, according to statistics by Mubasher.

Abu Dhabi Islamic Bank (ADIB) recorded the highest provisions, amounting to AED 377.74 million, down 3.7% from AED 392.31 million in H1-14, while Union National Bank (UNB) recorded the sharpest rise in provisions by 105% to AED 185.66 million compared to AED 90.6 million the year before.

Market analyst Waddah Taha said he expected growth to continue but at slower rates during the third quarter as challenges may arise to due to the drop in oil prices.

Translated by: Nada Adel Sobhi