The net profits of 10 UAE banks listed on the local financial markets rose to AED46.3 billion ($12.6 billion) during 2023. This reflects their strong financial solvency, strong revenues, and high liquidity, benefiting from the prosperity of the national economy.
According to disclosures of listed banks announced on financial market websites, net profits of banks from January to December 2023 increased by 63 percent, the equivalent of AED17.9 billion. That is compared to the net profits recorded in 2022, amounting to AED28.4 billion.
Performance of UAE banks
Edmund Christou, senior research analyst at Bloomberg Intelligence, described the performance of UAE banks last year as good where they exceeded their counterparts in the region. Moreover, major banks witnessed a noticeable increase in revenues of 27 percent over the past year.
Christou attributed the strong performance of UAE banks last year to strong commercial activities, abundant liquidity, and continued momentum in the real estate market. In addition, he highlighted the better-than-expected margin expansion and income gains from foreign currencies and investment.
The profits of 6 UAE banks listed on the Abu Dhabi Securities Exchange in 2023 reached AED9.81 billion. That is a 50.7 percent increase compared to profits worth AED6.24 billion in 2022. Meanwhile, the profits of 4 UAE banks listed on the Dubai Financial Market reached AED37.2 billion in 2023. That is a 66.2 percent increase compared to AED22.38 billion in 2022.
Emirates NBD accounted for the largest share of profits and the UAE’s banks. Hence, its profits jumped 65 percent to reach AED21.5 billion in 2023. This growth in profits is due to the bank’s asset growth, stability of low-cost financing, increased transaction volumes, and large amounts of low-value loan collection.
Among the most profitable banks in the UAE is Mashreq Bank. It achieved strong net profit growth reaching AED8.6 billion in 2023, a significant 130 percent year-on-year increase. This growth was driven by business growth, good profit margins, high interest rates, as well as positive cases related to loan loss provisions.
Dubai Islamic Bank
Dubai Islamic Bank recorded a growth of 26 percent year-on-year, with net profits exceeding AED7 billion compared to AED5.55 billion in 2022. The bank’s growth was due to an increase in unfunded income and a decrease in impairment losses.
Abu Dhabi Islamic Bank
Abu Dhabi Islamic Bank also witnessed some of the largest growth rates among the UAE banks. Its net profits grew by 45 percent in 2023, reaching AED5.25 billion compared to AED3.62 billion in 2022. The bank’s revenues recorded a growth of 36 percent reaching AED9.3 billion as a result of its success in diversifying income and growth. Hence, it recorded strong growth across all business segments and products.
Emirates Islamic Bank’s net profits jumped 71 percent reaching an unprecedented level at AED2.12 billion in 2023. Its growth was driven by the upward trend in funded and non-funded income. Therefore, this reflects an improvement in the business outlook.
RAKBANK also recorded impressive growth compared to other UAE banks. Its net profits rose 54.6 percent to AED1.8 billion last year, compared to about AED1.16 billion in 2022. This growth is driven by strong growth on both sides of the balance sheet. Moreover, this pushed net interest income to AED3.3 billion, a 34 percent increase supported by strong fee income of AED1.1 billion.
Sharjah Islamic Bank
The net profits of Sharjah Islamic Bank amounted to about AED841.5 million last year, a 31 percent increase compared to about AED650.9 million in 2022. Operating profits also witnessed an increase of 23 percent reaching AED2 billion compared to AED1.6 billion in 2022.
Fujairah National Bank marked impressive growth along with other UAE banks. Its net profits increased by 113 percent annually, ending 2023 with a net profit of AED725.1 million. That is compared to about AED340.4 million in 2022. The high level of flexibility in the bank’s main businesses, selective growth, and high interest rates supported that growth. Moreover, an effective investment portfolio and margin management contributed to the bank’s profit growth.
National Bank of Umm Al Quwain
The net profits of NBQ increased to AED502.6 million last year, which is 38 percent higher than the 2022 profits of AED364.52 million. Meanwhile, the net profits of the Commercial International Bank rose 14 percent from AED150 million in 2022 to AED171 million in 2023.
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