UAE banking sector poised for strong 2025: EY report
KHALED AL KHAWALDEH (ABU DHABI) The UAE's banking sector is set for strong performance in 2025, backed by strong non-oil growth, stable oil prices, large infrastructure pipelines and broadly robust capital level across the region, according to recent reports from global consultancy EY. The EY GCC Banking Sector Outlook 2024 report forecasted a continuation of 2024 trends which saw "rising lending volumes, increased fee income, stable margins and effective cost management", across the GCC region. "As we go into the first quarter of 2025, the GCC banking industry should remain strong due to considerable capital cushions, healthy asset quality indicators and adequate profitability," Mayur Pau, EY MENA Financial Services Leader, said. "Resilient economies, the region's economic diversification efforts and enabling policies will support higher consumption and investment, further boosting the sector's performance."EY anticipates that the banks in the UAE will continue to grow their lending activities bolstered by "relaxed monetary policies and a favourable economic environment". The report also highlighted that deposit growth consistently exceeded lending at UAE banks, which, it said, was driven by strong performance in both corporate and retail segments and was indicative of a robust sector. EY also forecasts that banks would continue to increase their lending as interest rates come down in line with the US Federal Reserve's cuts. "The upcoming financial year looks to be a transformative period, with advancements in technology, shifts in consumer behaviour and regulatory changes shaping the future of banking," Pau added. Ultimately, the strong performance of the banks is underlaid by the robust growth in the overall economy. A recent report by the Institute of Chartered Accountants in England and Wales (ICAEW) predicted the Middle East's GDP to grow by 3.3% and be largely "out of the firing line" of trade disputes. ICAEW singled out the UAE's particularly strong trade, broadened by the extensive CEPA programme which is set to continue expanding in 2025. Moreover, it highlighted the healthy budget surplus in the UAE, which it said would allow the country to continue to make and fund large infrastructure projects.
"The outlook for the non-oil sectors is for another year of strong expansion and we expect demand conditions in the region to remain supportive of activity. We see growth in Saudi Arabia and the UAE outperforming again, with expansion of 5.8% and 4.8%, respectively, thanks to a strong pipeline of infrastructure projects and private-sector development," the report said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Khaleej Times
22 minutes ago
- Khaleej Times
RAKBank profit after tax rises 26.1% to Dh1.374 billion for first half
RAKBank on Monday announced that profit after tax rose 26.1 per cent to Dh1.374 billion for the first of the year, driven by non-interest income growth and robust asset quality. For the second quarter, profit after tax stood at Dh669 million, reflecting an increase of 22 per cent year on year. The bank recorded an operating profit of Dh1.68 billion, up 7.7 per cent year on year on the back of strong growth in balance sheet and continued non-interest income momentum. Operating expenses rose 12.9 per cent vs last year driven by continued investments in technology, data, people and customer experience. Cost to income ratio (CIR) at 34.6 per cent vs. 33.6 per cent for the first half of 2024. Total assets grew by 18.1 per cent year on year to Dh95 billion, with gross loans and advances increased to Dh51.3 billion, an increase of 17.4 per cent year on year. Growth in loans driven by all segments, with wholesale banking loans growing by 33.0 per cent year on year, aligning with the bank's diversification strategy. The current and savings accounts (Casa) deposit base grew to Dh40.4 billion, up 12.2 per cent year on year, with Casa1 ratio of 66 per cent, one of the highest in the industry Portfolio credit quality remains robust with net impairment charge to average loans and advances ratio at 0.7 per cent against 1.7 per cent during the same period last year, resulting from a strategic shift in business mix towards secured, low risk assets as well as favorable economic and credit environment. The impaired loan ratio for the first half of 2025 improved to 1.9 per cent against 2.4 per cent for the first half of 2024 while 'provisions to gross loans' ratio was 5.2 per cent compared to 6.2 per cent as of the first half of 2024, providing adequate coverage. Shareholder returns improved with return on equity (ROE) of 22.1 per cent against 20.4 per cent in the first half of 2024 and return on assets (ROA) of 3.1 per cent against 2.9 per cent in the first half of 2024. The bank remains well capitalised with capital adequacy ratio (CAR) of 18.8 per cent as at the first half of 2025 against 18.0 per cent as at the first half of 2024. Strong liquidity position was reflected by an eligible liquid asset ratio of 15.1 per cent vs. 15.5 per cent at the first half of 2024 and lending to stable resources ratio at 80.7 per cent vs. 79.4 per cent at the first half of 2024. Operating income for the first half of 2025 amounted to Dh2.6 billion, a 9.5 per cent increase vs the first half of 2024. Operating Income for the second quarter was Dh1.3 billion, an increase of 7.4 per cent year on year. Net interest income rose 0.8 per cent compared to the first half of 2024 due to growth in total assets by 18 per cent year on year, despite interest income being impacted by 100 bps rate cut in the second half of last year. Despite external pressures on the net interest margin, on a risk adjusted basis, RAKBank's net interest margin improved by 37 bps to 3.3 per cent in the first half of 2025 compared to 2.9 per cent in the first half of 2024, as the bank shifts toward secured, low-risk assets. Non-interest income increased by 35.6 per cent from last year to Dh795 million, driven by the bank's efforts to diversify its fee income, forex income and episodic gains in investment income. Net impairment charges fell 52.5 per cent compared to the same period last year to Dh173 million, as the bank's portfolio quality improved with impaired loan ratio dropping to 1.9 per cent from 2.4 per cent as at the first half of 2024. Net impairment charge to average loans and advances ratio was at 0.7 per cent for the first half of 2025 compared to 1.7 per cent during the same period last year. Raheel Ahmed, Group Chief Executive Officer, RAKBank, said: 'We have, once again, achieved strong balance sheet growth and fee income. This growth reflects the strength of our diversified business model and continued balance sheet momentum. Portfolio credit quality remains robust with cost of risk improving to 0.7 per cent in H1 2025 from 1.7 per cent in H1 2024. On the back of the UAE's strong economic fundamentals, we remain confident in delivering a solid performance in the second half of 2025, supported by our strategic execution and sustained business momentum. However, we remain cautious about the geopolitical and global economic uncertainties, including the loosening of monetary policy across key economies and its impact on margins.'
Zawya
3 hours ago
- Zawya
EY Joins Angola Oil & Gas (AOG) 2025 as Gold Sponsor Amid Rising Capital Demand in Angola
Consulting firm EY has joined the 2025 edition of the Angola Oil&Gas (AOG) conference – taking place on September 3-4 in Luanda – as a Gold Sponsor. EY's return to the event reflects its commitment to supporting Angolan oil, gas and infrastructure projects, and comes as the country seeks new sources of finance to advance projects and support sustainable economic growth. Angola's oil and gas sector is rapidly growing, as companies increase their investments and new players enter the market. Striving to sustain oil production above one million barrels per day (bpd) while reaching 445,000 bpd in refining capacity, the country is promoting investment across the entire oil and gas value chain. It's strategic position at the intersection of Southern and Central Africa, combined with decades-long experience as a major producer and commitment to industry reform, makes it an attractive market for foreign capital. As the market grows, so does the demand for financial and tax support. Stepping into this picture, EY represents a strong partner for global and regional operators. Offering a suite of consulting, assurance, tax and transaction services, EY has long-played an instrumental role in supporting Angolan projects. With teams across 150 countries worldwide, the company brings its global expertise to the Angolan market, supporting project development through assurance, tax, law, strategy and transaction solutions. The company has been active in Angola for 68 years, providing services that are designed to assist energy and resource companies in navigating challenges and expanding their investments. Beyond offering support for global companies, EY's experience in the Angolan market provides an avenue for local SMEs to expand their footprint in the country's oil and gas sector. By providing tailored financing solutions for SMEs, the company works with local SMEs as they navigate the challenges and opportunities present across the market. As the largest event of its kind in the country, AOG 2025 has evolved to become the premier platform for signing deals. Bringing together Angolan government agencies, global operators and leading technology and service providers, the event seeks to spur a new wave of investment across the Angolan oil and gas value chain. EY's sponsorship reflect its commitment to supporting this development and will strengthen conversations around financing oil and gas projects in Angola. Distributed by APO Group on behalf of Energy Capital&Power.
Filipino Times
4 days ago
- Filipino Times
UAE, Türkiye hold first strategic council meeting in Ankara
UAE President His Highness Sheikh Mohamed bin Zayed Al Nahyan and Turkish President Recep Tayyip Erdoğan co-chaired the inaugural meeting of the UAE-Türkiye High-Level Strategic Council in Ankara on Wednesday. The meeting is held during His Highness' state visit to Türkiye. The two sides explored opportunities to deepen collaboration across a broad range of strategic sectors aligned with their respective national priorities and shared interests, particularly under the framework of the UAE-Türkiye Comprehensive Economic Partnership Agreement (CEPA). The discussions also reviewed progress in bilateral relations, with a focus on key areas such as the economy, trade, technology, industry, renewable energy, and food security. Both sides discussed regional and international developments, emphasizing the importance of diplomacy and dialogue in resolving conflicts and promoting peace in the Middle East. The UAE leader said the establishment of the Strategic Council reflects the strength of UAE-Türkiye ties and their shared commitment to growth, stability, and long-term cooperation. For his part, Erdoğan welcomed the UAE delegation and affirmed Türkiye's readiness to deepen strategic relations with the UAE. A luncheon was held in honor of the UAE President and his accompanying delegation, which included senior ministers and officials.
