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 UAE’s Top 10 Listed Banks’ Aggregate Net Income Grew by 54.1% in 2023


UAE’s Top 10 Listed Banks’ Aggregate Net Income Grew by 54.1% in 2023

Riding on higher interest rates, the aggregate net income of the UAE’s 10 largest listed banks grew by 54.1% y-o-y to $20.94 billion 2023, Dubai-based management consultancy Alvarez & Marsal said.

In its “UAE Banking Pulse” report, Alvarez& Marsal said that the total net interest income grew 27.6% y-o-y across the board as the Central Bank of the UAE followed the US Federal Reserve’s lead with interest rate hikes.

The 10 largest banks the report has cited, in terms of assets, are First Abu Dhabi Bank (FAB), Emirates NBD, Abu Dhabi Commercial Bank, Dubai Islamic Bank, Mashreq, Abu Dhabi Islamic Bank, Commercial Bank of Dubai, RAK Bank, Sharjah Islamic Bank, and National Bank of Fujairah.

All the data used in this report has been obtained from publicly available sources and calculation of several metrics has been changed from the previous version to accommodate available information, the report said.

The report said that these 10 banks were able to boost profitability on the back of a 100 basis point (bps) increase in the Emirates Interbank Offered Rate (EIBOR), despite fewer loans relative to deposits.

Almost all banks improved cost efficiency, with Mashreq reporting an 8.4% y-o-y drop in their cost-to-income ratio, followed by First Abu Dhabi Bank (FAB) and RAK Bank also recording strong improvements. Dubai Islamic Bank was the only outlier, with a 15.7% y-o-y increase in cost to income on the back of investments in growth and digitisation, the report said.

The loans and advances grew by 9%, mostly due to corporate and wholesale segment (+11.8% y-o-y) while deposits increased by 13.4% y-o-y driven by time deposits (+13.6% y-o-y) and CASA (+12.8% y-o-y).

NIM Expands

Net Interest Margins (NIMs) expanded by 36bps y-o-y to 2.8% and net income rose 54.2% y-o-y on the back of higher operating income (+17.2% q-o-q), and lower impairment charges (-19.8% y-o-y). RoE and RoA improved by 5.7% points YoY to 19.9% and 0.6% points YoY to 2.2%, respectively.

 “Mashreq led the pack with the highest growth rate in loans and deposits among the 10 banks, showcasing a 22.2% y-o-y increase in loans and advances (L&A) and a 28.5% y-o-y increase in deposits. This growth came primarily through the wholesale and retail sectors,” the report noted.

The overall cost of risk improved 0.73% y-o-y during 2023, as banks managed a 19.8% decrease in aggregate impairment charges amounting to $3.73 million. Mashreq witnessed the highest reversal in impairment charges by overturning $380,000 in 2023. Emirates NBD, Dubai Islamic Bank, and Sharjah Islamic Bank saw positive y-o-y shifts in cost of risk, while RAK Bank and Abu Dhabi Commercial Bank reported declines.


The profitability and NIM improved on the back of rising interest rate scenario and the banking sector reported strong operational profits (+28.8% YoY) than previous year.

“Non-oil sector will continue its increasing contribution to the UAE’s economy and the Emirates is expected to see strong construction activity, tourism benefiting from the National Tourism Strategy 2031, and government investments in infrastructure and green energy.

The banks are well covered for bad loans and the CAR (17.1%) is well above the regulatory requirement and expected to maintain profitability despite CBUAE likely to cut rates in the second half of 2024, in line with the US FED decision, the report added.

Global Business Magazine

Global Business Magazine

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