Emirati Banks Record 16.9% in the Return on Equity
The net profits of Gulf banks including Emirati banks increased by 2.6% on a quarterly basis and 9.2% annually.
Reaching $14.8 billion in the second quarter of the current year.
This data was reported by “Kamco Invest.”
Emirati banks topped the list with the highest return on shareholders’ equity at the end of Q2 2024, with a rate of 16.9%.
They were followed by Saudi and Qatari banks, each achieving a return on shareholders’ equity of 12.8%.
Kuwaiti banks stood at 10.4%, while Bahraini and Omani banks recorded 9.6% and 9%, respectively.
Net Profit Growth vs. Sharp Decline in Value Provisions
Despite the challenging economic environment, Gulf banks’ net profit growth contrasted with a significant decrease in value provisions held by regional banks on a quarterly basis.
Total bank revenues reached approximately $31.6 billion in Q2 2024.
The Emirati banks once again secured the top position in the Gulf region for net interest margin, reaching 3.47% in Q2 2024.
The high margins compared to their Gulf counterparts reflect abundant liquidity.
Allowing Emirati banks to benefit from interest rate cycles alongside asset growth.
Saudi banks followed closely with a net interest margin of 3.15%.
While Qatari and Kuwaiti banks achieved 3.03% and 2.96%, respectively.
UAE-listed banks also led in the largest growth in total loans on a quarterly basis during Q2 2024, with a 3.4% increase.
Strong lending to individuals contributed to this growth.
Saudi Arabia followed with a 3.1% increase, while Omani and Kuwaiti banks saw lending growth of around 2% and Qatari banks grew by 1.3%.
Decline in Value Provisions
Emirati banks experienced the most significant decline in value provisions.
Decreasing by 26.8% to $0.38 billion in Q2 2024 (compared to $0.52 billion in Q1 2024).
UAE’s foreign trade achieves a new historic record, recording 1.395 trillion dirhams in the first half of 2024. pic.twitter.com/hoDdRpwKVS
— UAE Voice (@uae_voiceeng) August 26, 2024
Saudi banks ranked second with a 26.2% decrease to $0.49 billion in Q2 2024 (compared to $0.66 billion in Q1 2024).
Kuwaiti and Omani banks also reduced loan loss provisions by 17.8% and 9.8%, respectively.
The rise of AI in banking and finance continues to impact profitability and operational efficiency.
While Gulf banks are adapting to changing market dynamics.
