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DUBAI, July 15 (Xinhua) — The 10 largest listed banks in the United Arab Emirates (UAE) have witnessed more profits in the first quarter of 2018 compared with the previous one, said a report on Sunday.
Global consulting service firm Alvarez & Marsal (A&M) said that in general, UAE’s banks “continue to perform well, with higher levels of profitability.”
Both return on equity (ROE) and return on assets (ROA) increased due to lower cost of risk and operating expenses, said the analysis.
“Nine out of 10 banks showed an increase in ROE,” explained A&M.
ROE, a key performance indicator measuring profitability in banking, improved to 15.8 percent in the first quarter this year from 14.1 percent in the previous one. ROA improved to 1.95 percent from 1.76 percent.
On the outlook, A&M said liquidity in the UAE’s banking sector is expected to remain healthy in 2018.
Saeeda Jaffar, managing director of the A&M’s Dubai office, said profitability of the top 10 UAE’s banks mainly improved, because “we have seen lower operating costs, which are decreasing at a higher rate than the previous quarter.”
However, Jaffar said “we saw an increase in leverage of the banks’ balance sheets.” The use of borrowed funds is defined as leverage in banking.
The country, with 10.5 million inhabitants, has 23 local banks and operating branches of 28 foreign banks.

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