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(AFP)
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Net profits by the country’s 46 banks are expected to have grown on average by between 10 and 15 per cent this year to surpass Dh20 billion for the first time since they began operating in the 36-year-old federation.
But analysts believe the sector’s performance did not match the surge in the country’s financial surpluses as a result of a sharp increase in crude oil prices.
“The expectations are that the UAE banks generally performed better this year than in 2006 and their earnings will naturally be higher,” said Mohammed Al Asumi, a Dubai-based economic and financial expert.
“The main factors for this growth were the economic upswing in the UAE due to high oil prices and expansion in other sectors, and the fact they were not directly affected by the sub-prime crisis. Another factor is most banks have overcome the problem they suffered last year following the collapse of many shares.”
UAE banks netted around Dh17.74bn in the first nine months of 2007 and figures by the Central Bank showed a surge in loans and advances, investments, deposits, capital, reserves and total assets.
The profits are only Dh2bn lower than the 2006 full-year earnings of nearly Dh19.78bn and experts expect the profits for the whole of 2007 to be higher.
“I believe net profits of UAE banks have grown by about 10 to 15 per cent this year. Some banks recorded five to 10 per cent growth, while others could have boosted earnings by at least 40 per cent,” said Moham-med Yassin, general manager at Emirates Securities. “This means total profits may have crossed Dh20bn this year.”
“But according to some sources, the profits of some banks were a bit lower as they were indirectly affected by the sub-prime crisis. Anyway, the performance this year was better, although this did not match the upsurge in the country’s swelling liquidity as a result of oil prices… perhaps this is because a part of this liquidity was invested abroad instead of being channelled into the local market.”
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