The top four banks in the UAE are expected to maintain stable profits despite a slowdown in the economy.
Ratings agency Moody’s, which made the prediction, said the four banks had collectively cut 6% from their operating expenses. The banks are expected to convert some of these savings into technology investment.
“Profitability was supported by higher yields on loans and stable funding costs, which drove higher net interest income, despite sluggish economic growth due to current oil prices,” said Nitish Bhojnagarwala of Moody’s.
First Abu Dhabi Bank, Emirates NBD, Abu Dhabi Commercial Bank and Dubai Islamic Bank reported a combined net profit equivalent to $1.8 billion in the second quarter.
Profitability in the quarter was roughly the same as it was in the corresponding quarter in 2016, however it fell slightly compared with the previous quarter due to a decline in fee and commission income.
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