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Low oil price reflects high pressure over UAE Banks

UAE Banks performance in the first quarter of 2016 faced decline  as a result of the fluctuating in the world markets and low oil price which is the main finance sources for the banks in the Gulf Countries. The first quarter showed tough operating conditions across the sector.

  • National Bank of Abu Dhabi (NBAD)reported net profits of Dh1.27 billion for the first quarter of 2016 down 11 percent compared to the first quarter of 2015.
  • Abu Dhabi Commercial Bank’s (ADCB) first quarter net profit of Dh1.02 billion was down 18.4 per cent compared to Dh1.25 billion in the same quarter last year.
  • Union National Bank (UNB) reported a 27 percent decline in first-quarter profits to Dh450 million compared to Dh615 million the first quarter of last year.The local banking sector is facing headwinds, which also saw some impact on the group’s profitability,” said Mohammad Nasr Abdeen Chief Executive Officer UNB.
  • ADIB reported a net profit of Dh482 million for the first quarter of 2016, up 6.9 percent compared to the same period in 2015. The bank’s total assets increased by 4.5 percent year on year to Dh119.2 billion in the first quarter.
  • The Central Bank of the UAE showed a significant increase in demand for credit despite the challenging economic environment. In March, 45 percent of banks saw an increase in demand for credit from businesses. Around 80 percent of the banks surveyed cited lower oil prices as a factor behind their tightening of lending standards to small and medium-sized enterprises (SMEs) and large firms.