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Top banks of UAE banks record more profit than last year
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Income rose by 85 percent during the first quarter of this fiscal
The net income of the top United Arab Emirates (UAE) banks has spiked by 85 percent in the first quarter of the year as economic conditions showed signs of improvement. A decline in operating expenses supported this growth, according to a report from consultancy Alvarez & Marsal.
According to Zawya, the trend is expected to continue throughout the year, given the UAE’s strong fiscal and external positions. However it said that the real estate industry continues to put pressure on UAE banks despite signs of a demand recovery.
“The sector is expected to rebound over the medium to long term, driven by measures such as offering citizenship and golden visas,” the report said. Loans and advances continued to contract in the first quarter, with a decline of 0.7 percent compared to the previous quarter. Deposits increased 1.2 percent.
The report covered the UAE’s biggest lenders by assets, including Emirates NBD, Mashreq Bank, and the Abu Dhabi Commercial Bank. The Central Bank of the UAE last year launched the Targeted Economic Support Scheme (Tess), a 50 billion dirhams zero-cost liquidity facility for banks in the country. It was introduced to help buffer the blow of the COVID-19 pandemic to banks. It was extended until June 2022.