First-quarter financial results for banks this year have been decidedly mixed, with about half reporting major gains and others still showing signs of stress from growing loan defaults.
Union National Bank (UNB), the UAE's sixth-largest by assets, posted a 26 per cent rise in first-quarter profit yesterday, beating analysts' estimates as borrowing costs declined and margins widened. The bank made Dh380 million (US$103.4m) during the quarter, up from Dh304m in the same period last year.
"Earnings [in the quarter] beat our estimates by 40 per cent and street estimates by 25 per cent helped by margin expansion, strong fee income and lower loan loss provisioning," analysts at HC Securities in Dubai said yesterday. "UNB continues to follow a cautious approach in credit expansion as reflected in its flat loan book, which is lower than its Abu Dhabi peers."
Mashreqbank, the country's fifth-largest lender by assets, yesterday reported a 48 per cent drop in first-quarter profits to Dh251m. The Dubai-based bank set aside Dh484m as a buffer against bad loans. That sum would otherwise would have been booked as profit.
Abdulaziz al Ghurair, the bank's chief executive, said that last year was "a real test for the UAE banking industry as the extent of the global economic situation continued to be revealed" but added he was "pleased that the bank is operating both profitably and prudently in its financial management, to ensure that we continue to be a major force on the regional banking landscape".
Those results followed mixed figures from the UAE's four largest banks this week and last week. All of the country's lenders are still dealing with a rise in defaults and slower loan growth as a result of the global downturn, and banks have already reported setting aside more than Dh2 billion in provisions during the first quarter. According to Central Bank figures, total provisions in the UAE's banking system rose to Dh34.4bn at the end of last month, up by almost 60 per cent from a year before.
Emirates NBD, the country's largest bank, this week reported quarterly profits of Dh1.11bn, down 12 per cent from the same period last year but ahead of analysts' estimates. First Gulf Bank reported a 23 per cent rise in profits and National Bank of Abu Dhabi said it made Dh1.03bn in the first quarter, its most profitable ever. Abu Dhabi Commercial Bank (ADCB) reported quarterly profits of Dh225m, down 36 per cent from the same period a year before.
Analysts say ADCB may be one of the most stressed lenders in the country despite its widening profit margins and improving investment performance. The bank is expected to set aside millions of dirhams more this year for bad loans as it deals with large exposures to Dubai World and two troubled Saudi conglomerates - the Saad Group and Ahmad Hamad Al Gosaibi and Brothers. Banks have not taken write-offs on loans to Dubai World, the Dubai Government conglomerate that is in talks to restructure $24.8bn (Dh91.09bn) of debt.
"We expect provisioning to be high in 2010," analysts at Al Mal Capital in Dubai said in a note yesterday.
afitch@thenational.ae
Farage on Muslim Brotherhood
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
PROFILE
Name: Enhance Fitness
Year started: 2018
Based: UAE
Employees: 200
Amount raised: $3m
Investors: Global Ventures and angel investors
The Prison Letters of Nelson Mandela
Edited by Sahm Venter
Published by Liveright
Landfill in numbers
• Landfill gas is composed of 50 per cent methane
• Methane is 28 times more harmful than Co2 in terms of global warming
• 11 million total tonnes of waste are being generated annually in Abu Dhabi
• 18,000 tonnes per year of hazardous and medical waste is produced in Abu Dhabi emirate per year
• 20,000 litres of cooking oil produced in Abu Dhabi’s cafeterias and restaurants every day is thrown away
• 50 per cent of Abu Dhabi’s waste is from construction and demolition
Results
Ashraf Ghani 50.64 per cent
Abdullah Abdullah 39.52 per cent
Gulbuddin Hekmatyar 3.85 per cent
Rahmatullah Nabil 1.8 per cent
What drives subscription retailing?
Once the domain of newspaper home deliveries, subscription model retailing has combined with e-commerce to permeate myriad products and services.
The concept has grown tremendously around the world and is forecast to thrive further, according to UnivDatos Market Insights’ report on recent and predicted trends in the sector.
The global subscription e-commerce market was valued at $13.2 billion (Dh48.5bn) in 2018. It is forecast to touch $478.2bn in 2025, and include the entertainment, fitness, food, cosmetics, baby care and fashion sectors.
The report says subscription-based services currently constitute “a small trend within e-commerce”. The US hosts almost 70 per cent of recurring plan firms, including leaders Dollar Shave Club, Hello Fresh and Netflix. Walmart and Sephora are among longer established retailers entering the space.
UnivDatos cites younger and affluent urbanites as prime subscription targets, with women currently the largest share of end-users.
That’s expected to remain unchanged until 2025, when women will represent a $246.6bn market share, owing to increasing numbers of start-ups targeting women.
Personal care and beauty occupy the largest chunk of the worldwide subscription e-commerce market, with changing lifestyles, work schedules, customisation and convenience among the chief future drivers.
What is graphene?
Graphene is a single layer of carbon atoms arranged like honeycomb.
It was discovered in 2004, when Russian-born Manchester scientists Andrei Geim and Kostya Novoselov were "playing about" with sticky tape and graphite - the material used as "lead" in pencils.
Placing the tape on the graphite and peeling it, they managed to rip off thin flakes of carbon. In the beginning they got flakes consisting of many layers of graphene. But as they repeated the process many times, the flakes got thinner.
By separating the graphite fragments repeatedly, they managed to create flakes that were just one atom thick. Their experiment had led to graphene being isolated for the very first time.
At the time, many believed it was impossible for such thin crystalline materials to be stable. But examined under a microscope, the material remained stable, and when tested was found to have incredible properties.
It is many times times stronger than steel, yet incredibly lightweight and flexible. It is electrically and thermally conductive but also transparent. The world's first 2D material, it is one million times thinner than the diameter of a single human hair.
But the 'sticky tape' method would not work on an industrial scale. Since then, scientists have been working on manufacturing graphene, to make use of its incredible properties.
In 2010, Geim and Novoselov were awarded the Nobel Prize for Physics. Their discovery meant physicists could study a new class of two-dimensional materials with unique properties.
