UAE lenders reported strong second-quarter financial results on Thursday as the country’s economy remained resilient despite uncertainties driven by the Iran war.
Abu Dhabi Commercial Bank reported a 31 per cent annual jump in its second-quarter profit on lower impairment charges and high non-interest income.
Profit attributable to equity holders of the bank for the period ending June 30 climbed to Dh3.3 billion ($898.5 million), the lender said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
Impairment charges for the three-month period fell by 55 per cent to Dh536 million, while non-interest income grew to Dh2.3 billion. The total net interest and Islamic financing income also grew during the period.
“ADCB’s performance in the second quarter reflects the strength of our franchise and the resilience of the UAE economy, which demonstrated remarkable momentum especially in the context of regional developments during the period,” said Ala’a Eraiqat, group chief executive of ADCB.
Deposits from customers in the first half of the year grew 14 per cent to nearly Dh527 billion and net loans and advances surged 18 per cent to Dh445 billion.
Mr Eraiqat said ADCB is “well positioned to play a central role in supporting the next phase of economic expansion”, as the UAE continues to invest across energy, transport, logistics, infrastructure, tourism and artificial intelligence.
Other banks in the UAE also reported strong financial results amid continued growth of the Emirates' economy.
First Abu Dhabi Bank, the UAE’s largest lender by assets, recorded a 4 per cent annual jump in its second-quarter profit to Dh5.7 billion as its net impairment charge slid 26 per cent to Dh950 million and its net interest income grew 15 per cent to Dh5.8 billion.
Customer deposits increased by 5 per cent year-on-year in the first half, while loans and advances increased by 16 per cent.
“The UAE government’s firm commitment to long-term resilience and economic progress provides a strong and sustained backdrop for business activity,” Hana Al Rostamani, group chief executive of FAB, said.
Emirates NBD's second-quarter profit, meanwhile, grew nearly 2 per cent to Dh6.4 billion as net interest income as well as fee and commission income jumped during the period.
RAKBank's second-quarter profit also rose 5.36 per cent to Dh702.3 million on higher net interest income and non-interest income.
The US-Israeli war with Iran has tipped the region into one of its worst geopolitical crises in decades. The conflict, which began on February 28 when Israel and the US bombed Iran, led Tehran to attack its Arab neighbours and close the Strait of Hormuz.
Despite five months of disruption, economies in the Gulf have maintained growth momentum, albeit at a slower rate, the International Monetary Fund said in June. In May, ratings agency Fitch retained its long-term issuer default rating of AA- for the UAE, stating that oil export revenue, due to higher crude prices, is expected to remain strong despite the conflict and to offset any immediate negative impact.
