By: Mahmoud Gamal
Dubai – Mubasher: The banks listed in the Dubai Financial Market (DFM) have reported higher growth in net profit during the first six months of 2018, exceeding the expected increases, on the back of the decline in bad debt provisions and the increase in operating profits.
The net profits of three DFM-listed banks – Emirates NBD, Dubai Islamic Bank (DIB), and Mashreq Bank – surged 21.4% year-on-year to AED 8.56 billion from January to the end of June, Mubasher’s data showed.
This growth stemmed from the increase in loans secured by real estate companies, as Expo 2020 Dubai approaches and sees a more rapid pace in the execution of its projects, senior financial analyst at Mena Corp Issam Kassabieh told Mubasher.
Absorbing the value-added tax (VAT) by those banks’ clients has mitigated their costs and, therefore, boosted their profits, Kassabieh added.
Banks that have exposure to Abraaj may suffer profits declines at the end of the year in proportion to the amount of their investments in the embattled company, the analyst said.
Abraaj has been facing allegations of money misuse in its $1 billion healthcare fund. In June, the Dubai-based investment firm filed for bankruptcy. It is reportedly undergoing a mega-restructuring plan.
A host of companies, particularly those listed in the UAE, have disclosed their exposure to Abraaj as per a circular issued by the Securities and Commodities Authority (SCA). Such companies included Air Arabia’s AED 1.2 billion exposure, Al Qudra Investments, and Commercial Bank of Dubai (CBD).
Analysts previously told Mubasher that companies’ disclosures of the level of their exposure to Abraaj would boost investor confidence in the markets.
Translated by: Muhammad Abdulwakeel
