The combined net profit of four major banks in the United Arab Emirates has vaulted to $4 billion in the first half of 2021, up 17 percent compared to the same period last year.
The four banks are: First Abu Dhabi Bank (FAB) Emirates NBD, Abu Dhabi Commercial Bank, (ADCB) and Dubai Islamic Bank (DIB).
The jump in the profit has been mainly due to lower loan-loss provisions, global ratings agency Moody’s said in a report. However, return on assets still remains well below pre-pandemic levels.
The four big banks account for 77 percent of UAE banking assets, Moody’s said.
Nitish Bhojnagarwala, Moody’s VP-Senior Credit Office, said: “The UAE’s four largest banks profits rose in the first half of 2021 as they booked lower loan-loss provisions.”
“We expect bottom-line profitability to gradually improve over the next 12 to 18 months as banks ease their provisioning efforts. However, provisioning could potentially pick up once again when the central bank’s loan repayment deferral program ends,” he added.
