The top four banks in the UAE, with a combined deposit base of Dh1 trillion, will post sturdy profits in the next 12 to 18 months on the back of higher returns on loans and stable funding cost, despite sluggish economic growth and weaker fee and commission income, according to Moody’s Investors Service.
The four lenders - First Abu Dhabi Bank (FAB), the second-largest financial institutions in broader Middle East region; Emirates NBD (ENBD), Dubai biggest bank by assets; Abu Dhabi Commercial Bank (ADCB) and Dubai Islamic Bank (DIB), the top Sharia-compliant lender in the country, reported a combined net profit of Dh6.7bn in the second quarter of this year. Aggregate net profitability was broadly flat versus year-on-year but fell 3.5 per cent quarter-on-quarter, partially due to a fall in fee and commission
"Profitability was supported by higher yields on loans and stable funding costs, which drove higher net interest income, despite sluggish economic growth due to current oil prices," Nitish Bhojnagarwala, a vice president at Moody's said in the report.
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Moody's raises ratings on Dubai Islamic Bank
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Banks in the hydrocarbon-depended economies of Arabian Gulf region have struggled to maintain profitability amid persistently low crude prices. Loan growth has remained subdued and non-performing loans have risen, especially in Saudi Arabia, the region’s biggest economy and largest banking market. Moody’s in August said the five biggest banks in the kingdom could face a declining profits next year on the back of reduced government spending that has affected economic growth and dampened credit demand.
The four lenders in the UAE have coped with the softer economic condition relatively better than their regional peers. Operating expenses across the banks were down by 6 per cent relative both to the previous quarter and to second quarter of 2016.
Provisioning for bad debts, however, depict a mixed trend at these lenders. “ENBD and FAB are showing an improving trend, while ADCB and DIB posted weakening trends,” Mr Bhojnagarwala said, adding that there could be a “modest rise in provisioning charges in the coming quarters”.
The combined deposits at the four banks also declined by 1 per cent, compared with the first quarter of this year. This slight drop, Moody’s noted, came after solid deposit growth in previous quarters for the UAE banking system, which suggests that liquidity pressure has been easing. Oil price levels will continue to be a factor that will continue to weigh down the deposit growth in the next few quarters, the ratings agency added.
Moody’s rates FAB at Aa3/Aa3 stable, a3; Emirates NBD at A3/A3 stable, ba1; ADCB at A1/A1 stable, baa3; and DIB at A3/A3 stable, ba2.
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Countdown to Zero exhibition will show how disease can be beaten
Countdown to Zero: Defeating Disease, an international multimedia exhibition created by the American Museum of National History in collaboration with The Carter Center, will open in Abu Dhabi a month before Reaching the Last Mile.
Opening on October 15 and running until November 15, the free exhibition opens at The Galleria mall on Al Maryah Island, and has already been seen at the Jimmy Carter Presidential Library and Museum in Atlanta, the American Museum of Natural History in New York, and the London School of Hygiene and Tropical Medicine.
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
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The National photo project
Chris Whiteoak, a photographer at The National, spent months taking some of Jacqui Allan's props around the UAE, positioning them perfectly in front of some of the country's most recognisable landmarks. He placed a pirate on Kite Beach, in front of the Burj Al Arab, the Cheshire Cat from Alice in Wonderland at the Burj Khalifa, and brought one of Allan's snails (Freddie, which represents her grandfather) to the Dubai Frame. In Abu Dhabi, a dinosaur went to Al Ain's Jebel Hafeet. And a flamingo was taken all the way to the Hatta Mountains. This special project suitably brings to life the quirky nature of Allan's prop shop (and Allan herself!).
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Company%20Profile
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Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
Building boom turning to bust as Turkey's economy slows
Deep in a provincial region of northwestern Turkey, it looks like a mirage - hundreds of luxury houses built in neat rows, their pointed towers somewhere between French chateau and Disney castle.
Meant to provide luxurious accommodations for foreign buyers, the houses are however standing empty in what is anything but a fairytale for their investors.
The ambitious development has been hit by regional turmoil as well as the slump in the Turkish construction industry - a key sector - as the country's economy heads towards what could be a hard landing in an intensifying downturn.
After a long period of solid growth, Turkey's economy contracted 1.1 per cent in the third quarter, and many economists expect it will enter into recession this year.
The country has been hit by high inflation and a currency crisis in August. The lira lost 28 per cent of its value against the dollar in 2018 and markets are still unconvinced by the readiness of the government under President Recep Tayyip Erdogan to tackle underlying economic issues.
The villas close to the town centre of Mudurnu in the Bolu region are intended to resemble European architecture and are part of the Sarot Group's Burj Al Babas project.
But the development of 732 villas and a shopping centre - which began in 2014 - is now in limbo as Sarot Group has sought bankruptcy protection.
It is one of hundreds of Turkish companies that have done so as they seek cover from creditors and to restructure their debts.