Banks net record Dh7.46bn in Q1

UAE Central Bank in Abu Dhabi (SAEED DAHLAH)

UAE banks netted record profits of Dh7.46 billion in the first quarter – the surge indicating that banks are heading for their best anual performance in 2008.

Central Bank figures showed profits were 23 per cent higher than Dh6bn in the first quarter of 2007 and close to the earnings by the country's 51 banks in 2003.

"Indications point to another record year for banks in UAE and other GCC states," said Mohammed Asumi, a Gulf economist.

"There are many reasons for this strong performance, such as the boom on back of high oil prices, upsurge in construction, and expansion of bank investments."

UAE banks had the best results in the region in 2007, when profits rose to an all-time high of Dh24.44bn from Dh19.7bn in 2006.

Loans and advances rose by Dh70bn to peak at Dh792.7bn. Deposits jumped to Dh773.5bn, while total assets soared to a record Dh1.343trn. Shareholders equity rose to Dh141.1bn.

"Our expectations are that the sector will see a growth of between 10-20 per cent," said Ziad Dabbas, share dealing advisor at the National Bank of Abu Dhabi.

"Taken individually, some banks could see their profits leap by 30 or even 50 per cent," he added.