UAE banks are expected to benefit from the planned increase in interest rates by the US Federal Reserve due to higher profitability, according to a report from S&P Global Ratings.
The Central Bank of the UAE usually follows moves by the Fed on interest rates, as the country's currency is pegged to the US dollar.
“On average, banks in the UAE will benefit from the planned increase in interest rates,” the rating agency said on Tuesday. “We calculate a 15 per cent increase in net income and 1.4 percentage-point rise in return on equity for every 100-basis-points increase.”
S&P Global economists expect the Fed to raise rates six times this year starting in March, and five more times in total in 2023 and 2024.
“Second-round effects of the increase in interest rates could come from a higher cost of risk and cost of funding,” it said.
The cost of funding is expected to rise as some deposits migrate from no-or low-interest to interest-bearing products. However, with around two-thirds of total deposits bearing no or limited interest, UAE banks' funding will remain a strength, it said.
“The net external asset position is also likely to shelter UAE banks against lower and more expensive global liquidity,” S&P Global Ratings said.
“We rate five banks in the UAE, the ratings on which all carry stable outlooks, reflecting our view that their strong capitalisation and profitability will continue to protect their creditworthiness over the next 12-24 months.”
Banks in the UAE, including First Abu Dhabi Bank, Emirates NBD and Dubai Islamic Bank, among others, have all reported higher 2021 profits as the country’s economy recovers from the coronavirus pandemic on the back of higher oil prices and fiscal stimulus measures.
First Abu Dhabi Bank, the UAE’s largest lender by assets, reported a 19 per cent jump in its 2021 profit on the back of higher net fee and commission income and gains on investments, while Emirates NBD’s full-year profit jumped 34 per cent to Dh9.3bn due to lower impairment allowances.
“We believe that banks will be more than capable of absorbing our projected increase in the cost of risk,” the rating agency said.
“Banks are also very efficient, with a cost-to-income ratio of around 36 per cent for the top 10 banks at year-end 2021. While we expect a slight increase in costs for some rated banks, efficiency will continue to support their profitability.”
EA Sports FC 26
Publisher: EA Sports
Consoles: PC, PlayStation 4/5, Xbox Series X/S
Rating: 3/5
Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2-litre%204-cylinder%20petrol%20(V%20Class)%3B%20electric%20motor%20with%2060kW%20or%2090kW%20powerpack%20(EQV)%0D%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20233hp%20(V%20Class%2C%20best%20option)%3B%20204hp%20(EQV%2C%20best%20option)%0D%3Cbr%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20350Nm%20(V%20Class%2C%20best%20option)%3B%20TBA%20(EQV)%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3EMid-2024%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3ETBA%0D%3C%2Fp%3E%0A
The specs: Volvo XC40
Price: base / as tested: Dh185,000
Engine: 2.0-litre, turbocharged in-line four-cylinder
Gearbox: Eight-speed automatic
Power: 250hp @ 5,500rpm
Torque: 350Nm @ 1,500rpm
Fuel economy, combined: 10.4L / 100km
New Zealand 57-0 South Africa
Tries: Rieko Ioane, Nehe Milner-Skudder (2), Scott Barrett, Brodie Retallick, Ofa Tu'ungfasi, Lima Sopoaga, Codie Taylor. Conversions: Beauden Barrett (7). Penalty: Beauden Barrett
Ticket prices
General admission Dh295 (under-three free)
Buy a four-person Family & Friends ticket and pay for only three tickets, so the fourth family member is free
Buy tickets at: wbworldabudhabi.com/en/tickets
The specs: 2018 Honda City
Price, base: From Dh57,000
Engine: 1.5L, in-line four-cylinder
Transmission: Continuously variable transmission
Power: 118hp @ 6,600rpm
Torque: 146Nm @ 4,600rpm
Fuel economy, combined: 5.8L / 100km
MATCH INFO
Euro 2020 qualifier
Ukraine 2 (Yaremchuk 06', Yarmolenko 27')
Portugal 1 (Ronaldo 72' pen)
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
Prophets of Rage
(Fantasy Records)
Timeline
2012-2015
The company offers payments/bribes to win key contracts in the Middle East
May 2017
The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts
September 2021
Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act
October 2021
Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence
December 2024
Petrofac enters into comprehensive restructuring to strengthen the financial position of the group
May 2025
The High Court of England and Wales approves the company’s restructuring plan
July 2025
The Court of Appeal issues a judgment challenging parts of the restructuring plan
August 2025
Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision
October 2025
Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange
November 2025
180 Petrofac employees laid off in the UAE
