Profit of four largest #UAE banks to grow in 2023 amid lower provisions and higher interest

Profit of four largest UAE banks to grow in 2023 amid lower provisions and higher interest

Profitability of the four largest banks in the UAE will continue to grow this year amid rising interest rates and the reversal of pandemic-related provisions charges as the Arab world’s second-largest economy continues to maintain strong growth momentum, Moody’s Investors Service has said.

The improving operating environment also supported the profitability of the lenders — First Abu Dhabi Bank, Emirates NBD, Abu Dhabi Commercial Bank and Dubai Islamic Bank — which account for about 77 per cent of banking assets in the UAE, Moody's said in its latest report on the country's banking sector.

The combined reported net profit of the four lenders climbed to $9 billion at the end of last year — up from $8 billion recorded in 2021 and $8.3 billion in 2019. The bottom line growth will continue in 2023, albeit at a slower pace, the rating agency said.

“The combined bottom line profitability of the four banks exceeded pre-pandemic levels in 2022, reflecting strong growth in interest income and normalised provisioning charges,” Nitish Bhojnagarwala, Moody’s vice president and senior credit officer, and analysts Azhar Bouzidi and Badis Shubailat said in the report.