UAE: Top 10 banks.

 
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The GCC banking sector recorded lower returns in 2016, particularly due to increased provisioning and impairment charges as loan asset quality remained under pressure, Gulf Business confirmed in a recently published special report. In the UAE, the banking sector posted a 6.3 per cent decline in net profit in 2016 although it recorded a return on assets of 1.6 per cent (compared to 1.9 per cent in 2015). The diversification in the UAE economy, including the service sector, is helping maintain growth, according to Gulf Business' annual Top 50 banks in the GCC report.

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Wholesale trade is growing, along with transport communication, and tourism and travel. Among UAE banks, Emirates NBD's loans rose by 7 per cent year-on-year, while Abu Dhabi Commercial Bank's rose by 8 per cent. Dubai Islamic Bank's financing portfolio also grew strongly.

Wholesale trade is growing, along with transport communication, and tourism and travel. Among UAE banks, Emirates NBD's loans rose by 7 per cent year-on-year, while Abu Dhabi Commercial Bank's rose by 8 per cent. Dubai Islamic Bank's financing portfolio also grew strongly.

A big development in the UAE is that the region's biggest merger, between the UAE's National Bank of Abu Dhabi (NBAD) and First Gulf Bank, was announced in 2016 and has recently been finalised. The merged bank is called First Abu Dhabi Bank (FADB). The combined $183bn asset base will be the GCC's second largest institution--just behind Qatar's QNB--but largest by equity.

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The merger is significant as it creates an institution that can compete regionally and internationally. FADB will become the number one wholesale bank in the region with international reach. The bank will look to drive growth in core home market sectors and will be able to better serve UAE corporates with international ambitions as well as support international companies operating in the country.

It will invest in distribution capabilities and focus on cross-selling wealth management products and services. Cost savings from the merger are estimated at Dhs500m ($136.1m) per year, with benefits realised over three years with an estimated one-time integration cost of Dhs600m ($163.4m).

TOP 10 BANKS IN THE UAE

(Based on total assets of listed banks at the end of 2016)

  1. Emirates NBD

    Assets in 2016 ($000): 121,972,233

    Assets in 2015 ($000): 110,688,858

    Growth (2015-2016): 10.19%

    2016 net profit ($000): 1,970,913

    Return on assets (ROA)...

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