The credit rating agency (Fitch) expected the UAE banks to increase profitability levels during the next year, supported by high oil prices and interest rates.
The agency said in its report, issued yesterday, Wednesday, that an increase in the interest rate in UAE banks by 200 basis points would lead to an expected increase in the value of operating profits. for banks by about 11%, and raises the operating profit/asset at risk ratio (which is the main measure of bank profitability at Fitch), to 40 basis points.
The agency stressed that the conditions within the UAE banks with regard to liquidity are still positive and favorable, supported by a slight growth in loans, and accordingly it expects an increase in the net interest margin index in the state banks for the year 2023.
