UAE’s Real GDP to increase by 5.3% in 2024, According to S&P Global
S&P Global Ratings expects a significant increase in the UAE’s real GDP to 5.3% in 2024, up from 3.4% in 2023.
2 min
This optimistic review is a result of the UAE banks’ exceptional performance in 2023, highlighted by the lower provisioning requirements and higher interest margins, in addition to improved liquidity levels as deposit growth outpaced new loan growth. The report also noted that the outlooks for the banks in the UAE are stable.
The agency attributes this economic momentum to the increase in oil production and the robust contribution of non-oil sectors, with growth expected from the hospitality, real estate, and financial services sectors.
S&P Global Ratings highlights the exceptional performance of some UAE banks, which achieved record profits in 2023. This success is attributed to robust credit growth amid an environment of rising interest rates. The positive economic climate has also led to lower provisioning requirements for new loan losses, further strengthening the banks’ financial results. This indicates a healthy banking sector that is well-positioned to support and benefit from the UAE’s economic growth.
Moreover, the agency predicts a positive track for bank profits, boosted by growth in non-interest income which reflects a surge in business and commercial activities.
S&P Global Ratings anticipates a cut in interest rates by the US Federal Reserve by 100 basis points in the latter half of the year and expects the Central Bank of the UAE to align with this adjustment due to the dirham’s peg to the US dollar. This scenario is seen to sustain banks’ net interest margins due to the higher interest rates, thereby supporting profitability.
The agency also foresees a steady strengthening in retail lending as banks keep penetrating this sector. And the UAE banks’ funding structures are deemed robust with high liquidity levels, as evidenced by the average cash and money market instruments of the top 10 banks reaching 21.8 percent at 2023’s close, and a solid core customer deposit base that grew by approximately 12 percent last year.
Additionally, Standard & Poor’s highlighted that UAE banks remain in a strong position in terms of net foreign assets, which increased to 27.9 % of system-wide domestic loans as of 30th November 2023, from 9.6 % at the end of 2021.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Highlighting a significant recovery and robust growth across all key performance metrics.
3 min
Bank of Sharjah has released its results for the period ending 30 June 2024, showcasing robust performance and strong momentum since the beginning of the year. The Bank reported a net profit of AED 171 million, a significant turnaround from the AED 144 million loss in the same period last year.
This remarkable improvement is attributed to a substantial increase in net interest income, stringent credit underwriting, and reduced operating costs, marking a 233% increase over the previous year when excluding the one-time impairment charge from de-linking its Lebanese subsidiary.
The Bank’s exceptional financial results highlight the effectiveness of its strategic focus on sustainable growth, with notable improvements across all major performance metrics. Funded and unfunded income both saw increases, with net interest income rising by 108% and operating income growing by 34%.
Additionally, the cost-to-income ratio improved significantly to 40.1% due to cost discipline measures. The balance sheet remains strong with a loans-to-deposits ratio of 86.63%, indicating comfortable liquidity. The Bank also maintains strong capitalization, with a regulatory capital adequacy ratio exceeding 15% and Tier 1 and CET1 capital ratios around 14%. These positive results underscore the Bank’s underlying strength, operational efficiency, prudent risk management, and ongoing enhancement of shareholder value.
Commenting on the Bank’s results, Sheikh Mohammed bin Saud Al Qasimi, Chairman of Bank of Sharjah, stated: “We are pleased with our outstanding performance in the first half of 2024, which reflects our commitment to adding value to our customers, supporting our communities, and rewarding our shareholders. Despite the challenging geopolitical situation in the region, the UAE economy has remained resilient and continues to register healthy growth following various economic diversification initiatives that provide consistent impetus for trade, investment, and wealth creation. Bank of Sharjah has entered a new chapter with a new leadership team, focused on building new business streams, expanding our reach across the UAE and the region, and delivering exceptional service to our customers.”
He added: “Our performance in the first half of the year demonstrates the effectiveness of our new strategy, and we look forward to delivering continued growth in the years to come.”
The CEO, Mr. Mohamed Khadiri, commented “2024 has begun exceptionally well for Bank of Sharjah, with the bank achieving a record year-on-year profit. I am delighted with our stellar performance as we continue to strengthen the bank’s fundamentals. Our outstanding results reaffirm that our new business strategy is on track to deliver sustainable revenue growth, driven by business expansion, operational efficiency, prudent risk management, and talent development. This achievement is also a testament to the Bank’s success in providing high-quality financial services that meet the aspirations and growing needs of our customers.”
He further added: “Bank of Sharjah is a strong and respected brand within the local community. We are leveraging our core strengths to build a platform that will operate at its full potential across the UAE and the region. The Bank remains focused on executing our strategy and is well-positioned to maintain strong performance throughout 2024 and beyond.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
