UAE bank results add to bullish sentiment

Improved earnings from UAE banks likely to add to bullish sentiment on Dubai and Abu Dhabi bourses
By Reuters
Thu 31 Jan 2013 10:05 AM

Improved earnings from UAE banks are likely to add to the bullish sentiment on the Dubai and Abu Dhabi bourses on Thursday, which are both at multi-year highs.

Dubai's top lender Emirates NBD (ENBD) posted a fourth-quarter net profit that more than tripled on the back of lower impairments and increased non interest income, beating analysts' forecasts.

ENBD has proposed a cash dividend of 25 percent for 2012, up from 20 percent for 2011.

The stock is up 17 percent this week on expectations of higher dividends and strong earnings.

Abu Dhabi Commercial Bank beat forecasts with a 32 percent jump in quarterly net profit, also proposing a 25 percent cash dividend for 2012.

"Overall, the results are positive - provisioning is declining and you see non-performing loans flattening, which signals that banks are becoming more comfortable from an asset quality perspective," says Ali Adou, portfolio manager at The National Investor. "It seems the provisioning cycle has bottomed."

The Abu Dhabi property sector, recently a focus of market speculation ahead of the merger of its two largest developers, Aldar Properties and Sorouh Real Estate, may be more downbeat after the latter's fourth-quarter profit missed analyst forecasts.

On global markets, Asian shares are taking a breather from recent rallies, though sentiment was underpinned by the US Federal Reserve's pledge to retain its stimulus policy and on signs of stabilisation in the euro zone.

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Last Updated: Thu 26 Jan 2017 01:27 PM GST

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