GCC banks first quarter profits hit five-year high

Reading Time: 2 minutes

GCC banks had a stunning first three months of 2012, recording their highest quarterly profits for five years, owing mainly to lower provisions and vibrant business conditions, according to a new report.

Kuwait-based Global Investment House covered 22 banks from the six GCC countries and reported that profits increased by 18 per cent for the first quarter of 2012 compared to the same period the previous year, with Qatar leading the way. The rise reached 38 per cent for the final quarter of 2011.

“GCC banks under our coverage saw their profits improving mainly on account of strong interest income as well as lower provisioning expense and operating costs,” the report said, as quoted in Gulf media.

“The aggregate quarterly profit is the highest recorded in the past five years. Qatar once again exhibited the strongest yearly and quarterly growth in profits with a rate of 58 and 68 per cent respectively.”

NPL provisions were down by almost 46 per cent in the first quarter of 2012, according to the report, after a large rise in the fourth quarter of 2011.

It added that while provision expenses had come down for all countries quarter-on-quarter, on a year-on-year basis, banks in the UAE and Kuwait recorded a decline in provisioning by around 14 and 15 per cent respectively.

“In UAE, all banks under our coverage saw a decline in provisioning expense with the exception of Union National Bank which saw its provisioning expense go up by 67 per cent with annualised net cost of risk standing at 81 basis points in the first quarter of 2012 against 50 basis points in the same quarter of 2011,” the GIH report was quoted as saying.

Only UAE banks were down in terms of year-on-year profit, falling eight per cent, although aggregate profits on a quarterly basis rose by 50 per cent.

The report said the figure is affected by the one-off sale of Network International by Emirates NBD in the first quarter of 2011.

“Adjusting for this, UAE’s aggregate profitability too was up by 61 per cent year-on-year,” the report said.

For Saudi Arabia, yearly and quarterly profit was up 13 per cent and 20 per cent, respectively, while Kuwait figures were two per cent year-on-year and 35 per cent quarter-on-quarter.

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid

GCC banks had a stunning first three months of 2012, recording their highest quarterly profits for five years, owing mainly to lower provisions and vibrant business conditions, according to a new report. Kuwait-based Global Investment House covered 22 banks from the six GCC countries and reported that profits increased by 18 per cent for the first quarter of 2012 compared to the same period the previous year, with Qatar leading the way. The rise reached 38 per cent for the final quarter of 2011. “GCC banks under our coverage saw their profits improving mainly on account of strong interest income...

Reading Time: 2 minutes

GCC banks had a stunning first three months of 2012, recording their highest quarterly profits for five years, owing mainly to lower provisions and vibrant business conditions, according to a new report.

Kuwait-based Global Investment House covered 22 banks from the six GCC countries and reported that profits increased by 18 per cent for the first quarter of 2012 compared to the same period the previous year, with Qatar leading the way. The rise reached 38 per cent for the final quarter of 2011.

“GCC banks under our coverage saw their profits improving mainly on account of strong interest income as well as lower provisioning expense and operating costs,” the report said, as quoted in Gulf media.

“The aggregate quarterly profit is the highest recorded in the past five years. Qatar once again exhibited the strongest yearly and quarterly growth in profits with a rate of 58 and 68 per cent respectively.”

NPL provisions were down by almost 46 per cent in the first quarter of 2012, according to the report, after a large rise in the fourth quarter of 2011.

It added that while provision expenses had come down for all countries quarter-on-quarter, on a year-on-year basis, banks in the UAE and Kuwait recorded a decline in provisioning by around 14 and 15 per cent respectively.

“In UAE, all banks under our coverage saw a decline in provisioning expense with the exception of Union National Bank which saw its provisioning expense go up by 67 per cent with annualised net cost of risk standing at 81 basis points in the first quarter of 2012 against 50 basis points in the same quarter of 2011,” the GIH report was quoted as saying.

Only UAE banks were down in terms of year-on-year profit, falling eight per cent, although aggregate profits on a quarterly basis rose by 50 per cent.

The report said the figure is affected by the one-off sale of Network International by Emirates NBD in the first quarter of 2011.

“Adjusting for this, UAE’s aggregate profitability too was up by 61 per cent year-on-year,” the report said.

For Saudi Arabia, yearly and quarterly profit was up 13 per cent and 20 per cent, respectively, while Kuwait figures were two per cent year-on-year and 35 per cent quarter-on-quarter.

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid