UAE banks expected to return to pre-pandemic profit levels

Lenders in the United Arab Emirates are expected to return to pre-pandemic levels of profitability in the next 12-18 months amid stronger net income, S&P Global reports.

According to the report, banks in the UAE are expected to record an increase in lending this year as the Arab world’s second-largest economy charts a strong recovery from the Covid-19 pandemic, according to a new report.

First Abu Dhabi Bank, Emirates NBD, Abu Dhabi Commercial Bank and Dubai Islamic Bank, among others, have all reported higher 2021 profits as the country’s economy recovers from the pandemic, helped by higher oil prices and fiscal stimulus measures, the report added.

The combined net profit of the country’s four largest banks was up 31 per cent, to $8bn in 2021.

“Higher oil prices, supportive government policies and improving economic sentiment could lead to a faster return to pre-pandemic levels. We have raised our assumption for Brent oil prices to an average of $85 in 2022.”

UAE banks are also only expected to see a limited impact from the Ukraine-Russia crisis, since they have limited exposure to these regions.

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