A monitoring conducted by "Emirates Today" stated that the national banks achieved, for the second year in a row, annual growth of two numbers in their net profits, amounting to 11.8%, as 16 of the 18 banks listed in the country's financial markets recorded 46.4 billion dirhams in net profits for the year 2019, compared to 41.5 billion dirhams at the end of 2018.
For their part, two bankers attributed the continued profitability of national banks to the growth of bank facilities, investments and deposits, which positively affect the profitability of banks, noting that banks have maintained the pace of their business during the past year, and have not been negatively affected by global market conditions.
National banks
In detail, the national banks continued, for the second year in a row, to achieve annual growth of two numbers in its net profits, as 16 of the 18 banks listed in the country's financial markets recorded 46.4 billion dirhams in net profits for 2019, compared to 41.5 billion dirhams at the end of a year. 2018, with an annual growth of 11.8%, according to a monitoring conducted by «Emirates Today» based on the financial statements announced by these banks, except for two banks, Bank of Sharjah and the Investment Bank, who have not yet disclosed their results until the completion of the monitoring.
Emirates NBD topped the list of the highest profit banks with a value of 14.5 billion dirhams, followed by Abu Dhabi the first with a net profit of 12.5 billion dirhams, while Dubai Islamic Bank came third with 5.1 billion dirhams.
Emirates NBD topped the list of the most growing banks annually with net profit, at 44.4%, followed by Commercial Bank of Dubai with a growth of 20.5%, while National Bank of Ras Al Khaimah came in at 20%. The monitoring showed that the profits of five banks declined: Emirates Investment (- 77.3%), then Ajman Bank and Commercial International Bank by -50% each, then Fujairah National Bank by -10%, and finally Abu Dhabi Commercial Bank by -1%.
According to the data, the United Arab Bank recorded a significant decline in its profits, reaching a loss of 471 million dirhams, compared to a net profit of 77 million dirhams for the year 2018, equivalent to a negative change of -111%.
Banking facilities
For his part, the financial auditor and tax agent, Mohamed Helmy, said that "the bank facilities witnessed reasonable growth in 2019, despite the global market conditions, and this is the main operational activity that banks rely on to achieve profits", stressing that the increase in lending, as well as investments and bank deposits, all show In the annual growth of bank profits, in addition to the release of allocations that banks had avoided in anticipation of non-payment of some debts, as the default rate decreased greatly thanks to the credit inquiries, and thus the banks no longer avoid large coverage that affects their profits.
Global Market
For his part, the banking expert, Amjad Nasr, said that “the global market conditions, and the economic downturn in general, did not affect the local market in a large percentage, there is still a growing demand for loans, whether for companies or individuals, whether at a lower rate but with better quality. On the other hand, the banks expanded in other investments, especially the Islamic banks that invested in sukuk, pointing out that the banks' announced budgets are combined, and also reflects their external expansion in order to achieve additional profits for them.
Nasr added that "the mergers that took place between the banks, the reduction in the number of branches and the digital transformation have reduced the operating cost, which allowed for greater profits." He pointed out that the credit query contributed to the quality of lending and the absence of large troubles, which need high allocations, and this all leads to Profit growth.