Abu Dhabi’s Banks Stronger Than Dubai’s on Faster Loan Growth: Arab Credit - Bloomberg

Abu Dhabi banks are posting stronger earnings than Dubai-based lenders as lending in the United Arab Emirates’ capital increases and the highest provisions for more than a year curb profit for banks in the second-largest emirate.

Abu Dhabi’s three largest banks posted better-than- expected profit in the third quarter, while Dubai-based Emirates NBD PJSC, the U.A.E.’s biggest lender by assets, missed estimates. Provisions for non-performing loans in the the Persian Gulf nation rose 14 percent in the first nine months of 2011 to 50.4 billion dirhams ($13.7 billion), the highest since at least April 2010, when Bloomberg began tracking the country’s banking data.

“Banks in Abu Dhabi have suffered much less from their exposures to government-related issuers and are still managing to grow their loan books in what is a subdued operating environment,” said Khalid Howladar, a senior credit analyst at Moody’s Investors Service in Dubai. “Profitability for Dubai banks will continue to be suppressed for the coming quarters on the back of reduced loan growth and continued provisioning.”

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