Banks in the UAE have continued the strong growth levels seen in 2013 and posted healthy first-quarter net profits.
One of the fastest growing banks in the country is Dubai-based Emirates NBD which posted a 25 per cent increase with net profits hitting AED1bn ($272.3m).
The countrys banks are benefiting from the revived confidence in the UAEs economy, fuelled by a resurgent real estate market and anticipated increased investment in infrastructure.
UAEs GDP is forecast to grow at 4.4 per cent this year, rising to 4.2 per cent by 2015.
The majority of the banks has posted increases, or in a few cases relatively flat profits, in the first quarter of 2014 compared to the same quarter last year. As yet, no banks have recorded significant losses.
National Bank of Abu Dhabi posted flat results, posting AED1.406bn, which is almost exactly the same as recorded in the same quarter last year. The bank did however post rising loan and deposit volumes.
The generally positive results suggest that the UAEs banking sector is well on its way to recovery following the financial crisis in 2009-10, which left them with a huge volume of unpaid debts owed by consumers and companies alike.
The proportion of problem loans to gross loans leapt from 4.69 per cent in 2009 to 9.30 per cent in 2010, rising to 10.52 per cent in 2011, as the financial crisis began to take its toll.
UAEs banks have worked to reduce this volume of problem loans which fell to an average of 9.5 per cent across the sector by mid-2013. Regulations, such as those placing limits on mortgage lending, have been put in place to prevent banks overextending themselves again.
The majority of banks in the country have been working on attracting new customers and building up their deposit bases. Many banks are increasing their lending activity in line with the growth in their deposit base, ensuring that they are less reliant on raising large sums of external financing to fund their expansion plans.
Banks are also investing in technology such as improved online services to win new customers.
Armed with healthier looking balance sheets and a stronger economic outlook for the country, the UAEs banking sector will become increasingly competitive as they vie to win business.