By Mahmoud Gamal
Abu Dhabi – Mubasher: UAE banks registered a slide during the first nine months of the fiscal year 2016 as debt provision increased due to the slowdown of some economic activity and lower oil prices.
According to Mubasher statistics, their net profit stood at AED 27.60 billion ($7.51 billion), compared with AED 29.66 billion ($8.07 billion) for the year-ago period.
Banks listed in the Abu Dhabi Securities Exchange (ADX) achieved AED 16.68 billion profits, lower 9% year-on-year from AED 18.32 billion.
Meanwhile, banks on the Dubai financial market (DFM) earned AED 10.91 billion, down 3.7% from AED 11.34 billion for the year-ago period.
Moreover, UAE banks' provisions for the same period saw a rise ranging from 15% to 50%, which exceeds AED 10 billion, the statistics revealed.
Emirates NBD was the strongest performer after earning AED 5.38 billion with a 7.8% growth, followed by National Bank of Abu Dhabi that fell 5.5% to AED 3.97 billion.
Meanwhile, the Arab United bank was the worst performer after registering AED 107 million profits, lower 80% year-on-year.
UAE banks are likely to face more pressures up till the end of 2016 due to lower liquidity levels that are affected by the increase of commission on higher interest rates as well as the decline of state deposits, said Fadi El Ghattis, the CEO of Think Financial Studies.
The UAE banks did not cut any provisions due to bad debts but late payments, said market analyst Waeel Mohsen, explaining that even the cut of some provisions is a precautionary measure amid the slowdown of economic activities and the real estate sector's recession.
Over the third quarter, the sector recorded AED 9.03 billion profits, declining 2% year-on-year from AED 9.22 billion.
