According to a report by KPMG International

UAE banking sector records 31% growth in net profits in 2022

  • Abbas Basrai: "The UAE has a strong economy and a resilient business environment, and has attracted large inflows of foreign investment."

  • UAE banks have maintained adequate capital levels well above minimum regulatory requirements. Archival

image

The UAE Banking Outlook report, issued by KPMG, a global audit, tax and advisory firm, confirmed that the banking sector in the UAE witnessed a promising year in 2022, and the sector is expected to continue at this level of momentum in 2023, in light of the increasing demand for digital financial services, and the rapid adoption of financial technology solutions that enhance customer experience and competitiveness.

and financial and operational performance

The report included the top 10 banks in the country, which enjoyed strong operational and financial performance during 2022, with a 31% increase in their net profits. The cost-to-income ratio improved during the year on average by 1.8%, and banks maintained adequate capital levels well above minimum regulatory requirements.

The report also revealed that total assets of the banking sector increased by 10.6% year-on-year, due to strong growth in deposits, loans and advances.

Strong economy

Abbas Basrai, Partner and Head of Financial Services at KPMG Lower Gulf, said: "The UAE, which has a strong economy and resilient business environment, has attracted large inflows of foreign investment, and banks have benefited from large pools of capital and high net worth dealers in the country.

"The government's commitment to review regulatory legislation is one of the key factors contributing to the stability of the sector, as the actions taken by the Central Bank have strengthened governance frameworks and laws of transparency and accountability."

Risk Management

According to the report, banks are recording an increase in the cost of complying with managing the risks associated with regulatory reform. From 2019 to early 2022, the Middle East recorded a 63% increase in compliance teams across its organisations.

The report pointed to an improvement in net sentiment in the manufacturing sector compared to last year, based on 96,321 tweets about seven UAE banks tracked from January 31 to December 2022, <>.

Digital Growth

Competing in a dynamic environment, banks in the UAE are embarking on digital growth strategies that focus on the adoption of cloud computing technologies, which are expected to provide significant benefits, including scalability and flexibility, faster time to value and cost-effectiveness.

Consumer demands are also pushing banks to offer technology-enabled services beyond traditional banking, at a time when banks operating in the UAE, especially major banking institutions, are seeking to adopt a metaverse to provide financial services to customers.

• Total assets of the banking sector increased by 10.6% due to strong growth in deposits, loans and advances.