Banks report high profits in 2011

National banks in the UAE netted nearly Dh21.2 billion in 2011 to record one of their best ever financial year although lending has remained generally stifled, their balance sheet showed.

The income was nearly 50 per cent above the 2010 net profits of Dh14.6 billion and 43 per cent over their pre-crisis earnings of Dh14.8 billion in 2007, the figures showed.

Banks began recovering in 2010 when they recorded a 6.2 per cent growth in net profits following a slowdown caused by the 2008 global fiscal distress and ensuing regional debt default problems in 2009.

The figures, published in the Arabic language daily Alkhaleej, showed their combined assets leaped by nearly 43 per cent to Dh1.3 trillion at the end of 2011 from Dh940 billion at the end of 2007.

Deposits with the banks also soared by around 41.6 per cent to Dh808 billion from Dh570 billion in the same period.

Analysts attributed the high profits in 2011 to better investment and operating income, noting that domestic credit has remained muted as banks are still risk-averse and more selective in lending.

Central Bank figures showed credit by the country’s 51 national and foreign banks grew by just 4.2 per cent in the first 11 months of 2011 compared with more than 30 per cent in 2007-2008.

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