GCC banks post 9.1 per­cent loan growth

The Pak Banker - - COMPANIES/BOSS -

Net earn­ings of GCC banks in­creased 4.7 per cent to $5.3 bil­lion in fourth quar­ter 2015 with the UAE banks record­ing the most in­crease at 11.8 per cent, fol­lowed by Saudi banks at 3.7 per cent and Kuwait at 1.1 per cent.

Net profit of Qatari banks de­clined 2.1 per cent, Global In­vest­ment House said in its Bank­ing Sec­tor Quar­terly re­port. The col­lec­tive loans dis­bursed by GCC banks un­der Global In­vest­ment House's cov­er­age in­creased by 9.1 per cent to $793 bil­lion in the same quar­ter, with Qatar lead­ing with 16.2 per cent year on year growth fol­lowed by the UAE at 8.1 per cent.

Qatar-based banks man­aged to main­tain highest lend­ing growth due to an in­crease in pub­lic sec­tor spend­ing backed by sev­eral de­vel­op­men­tal ini­tia­tives taken by the gov­ern­ment prior to Fifa World Cup 2020. Among Qatar-based banks, Qatar Is­lamic Bank, Doha Bank and Qatar Na­tional Bank reg­is­tered higher growth in lend­ing of 46.1 per cent, 14.5 per cent and 14.8 per cent, re­spec­tively. Loans growth of UAE banks was at 8.1 per cent dur­ing the quar­ter. De­spite, Dubai Expo 2020 on cards, lend­ing growth of the coun­try might get hurt due to fall in oil prices. Among the UAE banks, Emi­rates NBD (10 per cent) achieved highest lend­ing growth, fol­lowed by Abu Dhabi Com­mer­cial Bank (9.3 per cent) and First Gulf Bank (7.2 per cent). Saudi banks posted 6.5 per cent and Kuwait 6.2 per cent loan growth. The net in­ter­est in­come of GCC banks in­creased five per cent; how­ever, mar­gins re­mained un­der pres­sure, Global said in its re­port. The NII of banks in Saudi Ara­bia grew the most at 8.1 per cent, fol­lowed by Kuwait (3.9 per cent), Qatar (3.1 per cent) and the UAE (2.8 per cent).

Non-in­ter­est in­come of GCC banks fell 6.2 per cent in the quar­ter led by 1.1 per cent year on year de­cline in fee in­come and lower in­vest­ment gains. The UAE recorded a pos­i­tive change in non­in­ter­est in­come with 7.5 per cent growth, while Qatar (-22.5 per cent), Kuwait (- 16.2 per cent) and Saudi Ara­bia (-0.9 per cent) re­ported de­cline in non-in­ter­est in­come. Ac­cord­ing to Global, to­tal as­sets of GCC banks un­der its cov­er­age ex­panded 7.4 per cent to $1.3 tril­lion in 2015 last quar­ter. Qatar-based banks wit­nessed the strong­est growth in to­tal as­sets (11.9 per cent), fol­lowed by banks in the UAE (9.8 per cent), Saudi Ara­bia (3.4 per cent) and Kuwait (2.4 per cent).

Among UAE based banks, Emi­rates NBD re­ported 74 per cent profit growth in 2015 fourth quar­ter due to higher op­er­at­ing in­come and lower pro­vi­sions. ADCB fig­ure was 16.4 per cent due to higher net and non-in­ter­est in­come and lower pro­vi­sions. First Gulf Bank re­ported 10.8 per cent growth in net profit mainly due to higher non-in­ter­est in­come and lower tax­a­tion and mi­nor­ity in­ter­est. Rest of the banks in Global In­vest­ment House's cov­er­age re­ported dis­ap­point­ing bot­tom-line with de­cline in profitabil­ity in fourth quar­ter 2015, which par­tially off­set the profit growth of the UAE bank­ing uni­verse.

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