(MENAFN- Khaleej Times)Net earnings of GCC banks increased 8.8 per cent year on year to $5.8 billion on higher loan book and a drop in provisions in second quarter industry analysts said.
Net profits of banks in Kuwait increased the most (15.1 per cent) followed by banks in the UAE (13.1 per cent) Qatar (10.7 per cent) and Saudi Arabia (3.7 per cent) analysts at Global Investment House said. The collective loans disbursed by GCC banks under Global coverage increased by 10.0 per cent to $768.7 billion in second quarter with Qatar leading (13.9 per cent) followed by the UAE (11.8 per cent) Saudi Arabia (7.7 per cent) and Kuwait (6.8 per cent). "However margins remained under pressure on year on year basis due to a 16 basis points decline in the yield on assets leading to 11 bps shrinkage in net interest margin" Naveed Ahmed analyst at Global said. The net interest income of GCC banks increased 5.9 per cent and 1.8 per cent quarter to quarter. The NII of banks in Kuwait grew the most (12.1 per cent) followed by the UAE (6.0 per cent) Qatar (5.4 per cent) and Saudi Arabia (3.6 per cent). Global noted in its quarterly banking report that due to decline in fee income non-interest income of GCC banks grew 1.7 per cent during the quarter. While Qatar recorded a stable growth of 10.6 per cent in non-interest income Saudi Arabia (2.1 per cent) and the UAE (0.3 per cent) reported nominal rise in non-interest income. Kuwait (-3.5 per cent) witnessed a fall in non-interest income the Global report said. Fee income of the GCC banks under Global's coverage dropped by 1.4 per cent due to a 10.8 per cent year-on-year fall in the fee income of Saudi banks. On the other hand the UAE (6.3 per cent) Qatar (5.0 per cent) and Kuwait (4.3 per cent) reported increase in their fee income. Total assets of the GCC banks under Global's coverage expanded 9.8 per cent to $1.2 trillion in second quarter. Qatar-based banks witnessed the strongest growth in total assets (11.9 per cent) followed by banks in the UAE (11.0 per cent) Kuwait (8.2 per cent) and Saudi Arabia (8.1 per cent). Among UAE based banks Emirates NBD reported 25.9 per cent growth in net profit due to lower provision expenses and higher net interest income. The bank's fee income growth was stable during the quarter which added to the bottom-line. Abu Dhabi Commercial Bank reported 21.4 per cent growth in its bottom-line during second quarter "mainly due to a huge decline in provision expenses. The bank recorded a massive drop in its provisions due to improvement in asset quality" Global said. Union National Bank reported 10.2 per cent growth in its bottom-line in the quarter due to a significant increase in net and non-interest income. However higher provisions partially dented the bottom-line growth. Among Kuwait-based banks Commercial Bank of Kuwait registered a robust 33.1 per cent growth in its net profit due to higher non-interest income and lower provisions. In Qatar Qatar Islamic Bank reported a 26.9 per cent bottom-line growth mainly due to improvement in net and non-financing income. Among Saudi based banks Banque Saudi Fransi reported 14.9 per cent growth in bottom-line due to growth in net special commission-income non-special commission income and a huge decline in provision expenses. -
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