It achieved 62.8 billion dirhams in 2021, a decrease of 5.3% from 2020

For the first time in 6 years, total interest rates are declining in 16 national banks

Net interests and financing for 16 banks that recorded 66.3 billion dirhams during the year 2020. Archive

The proceeds of net interests and Islamic financing in 16 national banks declined, for the first time in six years, to record 62.8 billion dirhams during 2021, compared to 2020, which recorded 66.3 billion dirhams, a decrease of (negative 5.3%), according to a monitoring conducted by «Emirates Today». From the audited financial data of 16 national banks out of 18 listed on the Dubai Financial Market and Abu Dhabi Securities Exchange, while data for two banks were not available until the monitoring was completed.

Increase in benefits

According to the data, four banks achieved an increase in net interest income, led by Emirates Investment Bank, whose growth rate in this item jumped 87%, recording 71 million dirhams in 2021, compared to 38 million dirhams at the end of 2020, followed by Mashreq Bank with a growth rate 13.8%, then "Dubai Commercial" by 10%, while "Emirates Islamic" came in fourth place, with a growth rate of 1%.

In turn, the interest income in the remaining 12 banks "the subject of monitoring" decreased, at varying rates, led by Ajman Bank, which recorded a decline of (negative 19.7%), followed by Umm Al Quwain Bank by (negative 16%).

undo factors

Banking expert Amer Salem told "Emirates Today" that there are two main factors behind the decline in the proceeds of Islamic interest and financing in 2021, the first of which is the weak demand for financing in general, compared to the years before the pandemic of the Corona virus (Covid 19), due to the global economic situation, and concerns Taking a decision to borrow by individuals or companies in light of the uncertainty that prevailed at the time.

He added that the second factor is represented in the banks offering large offers, while reducing the profit margin, to be able to stimulate demand, and urge dealers to take financing, whether it is personal loans or credit cards, or other products.

Salem pointed out that the banks were also, in turn, selective in approving funding requests, meaning that the risk departments in the banks took into account that the customer was stable in his work, and had a stable income that was not affected by the repercussions of the pandemic, which put additional pressure on the operational activity of the banks, and then the interest proceeds and Islamic finance.

He pointed out that the investment sectors, such as real estate and financial markets, witnessed a calm in turn, which reduced the demand for financing to enter into investments in them, and thus affected the interest yield, expecting that 2022 will be much better than 2021.

• "Emirates Investment", "Mashreq", "Dubai Commercial" and "Emirates Islamic" recorded an increase in net interest during 2021.

• AED 71 million net interest income in Emirates Investment Bank during 2021.

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