UAE – Mubasher: UAE banks have seen an increase in probability in the first quarter of the year, supported by a hike in loans and stability in yield on credit, according to a report released on Thursday by international professional services firm Alvarez & Marsal (A&M).
Operating income surged in Q1-19, boosted by non-interest income, the report found.
Loans and advances for UAE’s top nine banks went up 1.54% from January to the end of March, while top nine lenders in the GCC country’s loans to deposit ratio (LDR) rose to 88.3%.
Alvarez & Marsal expected that liquidity of these banks would continue to be stable in 2019.
“Overall the profitability for the UAE banks has increased. This stems from increased operating income, reduced costs and increased balance sheet leveraging, offset by an increase in the cost of risk,” said managing director and Middle East Office co-head in the firm’s Strategic Performance Improvement Practice, Dr. Saeeda Jaffar.
Net interest margin (NIM) went down in Q1-19, as six of the top nine banks in the UAE recorded a decline in NIMs.
Meanwhile, return on equity was high despite the increase in the operating income,
During the three-month period ended 31 March, a number of the UAE-based banks have reported solid profits for the first quarter of 2019, recording AED 10.7 billion.
