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Surge in profits underscores strength & stability of Sharjah’s banking sector

Two of Sharjah’s leading banks, Sharjah Islamic Bank (SIB) and United Arab Bank (UAB), have announced increased profits for the first half of 2014 this week underscoring the strength of the emirate’s banking sector. Sharjah-headquartered UAB announced a 26% increase in net profit in the first half of 2014 compared to the same period last year, reaching AED 328 million (US$ 89 million); while SIB reported an impressive 50% increase in its first half net profit compared to H1 2013, rising to AED 202.1 million (US$ 55 million).

Both banks have recently been rated by Moody’s Investors Service, UAB receiving a Baa1/Prime-2 global foreign and local-currency deposit rating with a stable outlook in September 2013, in part, based on its strong core profitability, strong asset quality, capitalisation levels and high asset growth. Earlier this month, Moody’s announced that it had assigned issuer ratings of A3/Prime-2 and a standalone bank financial strength rating (BFSR) of D+ to SIB, which is equivalent to a baseline credit assessment (BCA) of baa3 with a stable outlook. The rating reflected SIB’s very strong capital buffers, low borrowing and satisfactory profitability.

UAB’s total loans and facilities grew by 35 per cent to AED17.9 billion (US$ 4.9b) during the first half of 2014, compared to the same period in 2013. The bank’s customer deposits grew by an impressive 49 per cent over the same period to total AED18.6 billion (US$ 5b). Additionally, UAB reported its operating profit for the first six months of 2014 was as AED 475 million (US$ 129m), a 43 per cent increase over 2013, with total income up 41 per cent to AED 676 million (US$ 184m).

SIB’s total loans and facilities reached AED 14.5 billion (US$ 3.9b) an increase of AED 2.0 billion (US$ 0.5b), a 15.7% increase since December 2013. According to the bank, customer deposits reached AED 13.7 billion (US$ 3.7b) rising by AED 1.8 billion (US$ 0.5b) or 14.8% growth since Dec 2013. SIB reported that its assets grew by 7.7% since December 2013 to total AED 23.4 billion (US$ 6.4b).

UAB was recently recognised as ‘Fastest Growing Bank in the Middle East’ and ‘Fastest Growing Bank in the UAE’ by The Banker Middle East at Industry Awards 2014, held in June of this year.

Source: UAB, SIB, Moody’s

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