The UAE’s top banks maintained high profits in the quarter ending June 2024, according to Alvarez & Marshal’s latest Banking Pulse.
The report found that the country’s banks’ profitability for Q2 2024 increased to Dh 21.5 billion ($5.8 billion), on the back of higher net interest income (NII) and lower impairment charges (-35.4% QoQ).
Despite interest rates remaining stable during the quarter, the banks’ average NII grew by 2% QoQ, due to a higher loan-to-deposit ratio (LDR).
Meanwhile, the non-interest income was slightly lower (-2.9% QoQ), bringing the growth in total operating income to a nominal +0.4% (QoQ) in an expansion of return on equity (RoE) by 48bps QoQ.
The average return on assets (RoA) remained stable at 2.2% during the quarter.
In terms of loans and advances (L&A), these grew moderately (+3.2% QoQ), as retail lending witnessed a surge of 8%, compared to the previous three months. However, deposits mobilisation slowed down (+0.4% QoQ), as a result to the decline in time deposits by 2.5%. Consequently, LDR increased by 2% QoQ.
