Banks in the UAE outperformed their counterparts in the Gulf Cooperation Council countries once again, achieving the highest return on equity of 16.9% at the end of the first quarter of 2024, according to a report by “Kamco Invest”. The report analyzed the performance of the banking sector in the region during this period.
UAE-listed banks experienced the largest year-on-year growth in return on shareholders’ equity at 280 basis points, driven by higher profits and relatively smaller growth in total shareholders’ equity. Kuwaiti banks also maintained a high return on equity at 10.4%, while Bahraini and Omani banks recorded returns on equity of 9.6% and 8.7%, respectively.
The net profit of the Gulf banking sector remained stable and showed good growth on a quarterly basis of 11.8% and annual growth of 10.5%, reaching $14.4 billion in the first quarter of 2024. This was achieved despite a decline in revenues due to a decrease in total operating expenses and impairment charges.
UAE-listed banks had the highest growth rate in deposits on a quarterly basis in the first quarter of 2024, reaching $803.2 billion, which is significantly higher than other Gulf countries’ deposits levels. Efforts are being made by Kuwaiti banks to increase local private sector deposits to secure low-cost financing for expected economic activity growth.
In terms of net interest margin, UAE ranked first among Gulf countries, reflecting abundant liquidity benefiting from a tightening interest rate cycle
