Expo will benefit businesses in the coming years.
With the third quarter 2021 results trickling in, there are clear indications that the UAE banks have left the worst behind and are entering a period of healthy growth in assets and profits.
Abdulaziz Al Ghurair, Chairman of the UAE Banks Federation, said the UAE’s banking sector is set for a strong recovery supported by rebound in the economy.
Al Ghurair expects aggregate banking sector assets in the UAE to grow in the range of 8 to 10 per cent and the UAE GDP to grow by about 5 per cent in 2022.
Rebound in all sectors that suffered during the Covid-19 crisis are expected next year with a boost from Expo 2020 Dubai supporting the medium term economic growth.
“The economy will reap benefits from the Expo 2020 for about nine years as more international visitors and investors will be attracted to the country,” said Al Ghurair.
Banks are already seeing improvements in key performance matrixes such as asset quality, liquidity, loans and deposit growth, profitability, loans to deposit ratio, costs and capitalization.
While the healthy fundamentals of the economy is expected to support banking sector performance during the current year and the next, Al Ghurair expects the non-performing loans (NPL) ratio of the UAE’s banking sector to moderate to 2 per cent in 2022 from the 8 per cent in the current year.
With the third quarter 2021 results trickling in, there are clear indications that the UAE banks have left the worst behind and are entering a period of healthy growth in assets and profits.
Al Ghurair said the central bank support was timely and substantial but the banking sector in the country is ready for the phasing out of the support under the Targeted Economic Support Scheme (TESS) of the Central Bank of UAE (CBUAE).
While the CBUAE is set for a gradual withdrawal of its direct liquidity support and regulatory forbearance measures, Al Ghurair said the banking sector no longer requires support.
“About 95 per cent of the banks have already surrendered their TESS quotas. This comes from their confidence that their customers are able to meet their credit commitments,” he said.
(Except for the headline, this story has not been edited by The Finance World staff and is published from a syndicated feed.)
