Two of UAE’s biggest banks beat estimates as economy boosts earnings

The two biggest banks in the United Arab Emirates posted a jump in annual profit, topping estimates, after the country’s strong economic growth helped to drive an increase in margins and net interest income.

Profit at First Abu Dhabi Bank PJSC rose 7 percent to 13.4 billion dirhams ($3.6 billion) after the lender’s “core businesses sustained positive momentum, resulting in double-digit growth in loans and deposits,” it said in a statement. Income rose 10 percent, boosted by a 23 percent growth in net interest income and gain on the sale of majority stake in payments business Magnati.

“Underlying operating performance across our core businesses was sustained during the fourth quarter despite a more challenging global macroeconomic outlook,” FAB Chief Executive Officer Hana Al Rostamani said in the statement. “This has provided us headroom to further build provision buffers, take a conservative stance on asset valuations.”

Meanwhile, profit at Emirates NBD PJSC surged 40 percent to Dh13 billion, while impairment charges fell 12 percent to Dh.5.2 billion dirhams. Dubai’s biggest bank “maintained strong income growth momentum, kept a firm control of costs, and benefited from writebacks and recoveries, reflecting a healthy regional economy,”
CEO Shayne Nelson said in a statement.

The UAE economy has been booming after the government’s handling of the coronavirus pandemic. The country also benefited from a surge in oil prices in the first half of 2022 and has become an attractive place for investors looking for a place to park their wealth.

The UAE looks “very immune if a recession in the world economy materializes this year,” Thani Al-Zeyoudi, the country’s minister of state for foreign trade, told Bloomberg TV in Davos last week.