UAE Banks to Maintain Strong Performance in 2024, Says S&P Global

S&P Global's analysts stated during a roundtable on the credit rating trends for the Gulf Cooperation Council (GCC) countries in 2024 that UAE banks will continue to achieve strong results during the current year, supported by prevailing interest rate levels so far.

Regarding the agency's commentary on the announced expansion of Al Maktoum International Airport and its impact on the real estate sector in nearby areas, it was anticipated that it would have a direct impact on projects and housing demand in the areas close to the new airport terminal.

During the roundtable meeting, analysts from "S&P Global" credit ratings discussed the trends and key issues pertaining to market sectors, banks, energy, companies, and infrastructure entities in the GCC countries.

Dr. Mohamed Damak, a financial institution ratings analyst at S&P Global Ratings, said,

"We expect three interest rate cuts this year, totaling 75 basis points in the second half of the year, followed by further cuts of 125 basis points in 2025."

He pointed out that Emirati banks will continue to achieve strong results this year, supported by the fact that interest rates remain high despite the expected trend of reduction.

Damak also said,

"When discussing asset quality, the picture remains strong, with a low level of non-performing loans and a coverage ratio of 100 percent, which is more than adequate."

Tatiana Liskova, a Standard & Poor's Global Ratings analyst, discussed the real estate sector in Dubai, noting increased transactions, demand, and prices recently. Developers have bolstered financial stability, with improved cash balances and collections. She emphasized the impact of Al Maktoum International Airport's expansion, slated to be the world's largest, on the city's economy and real estate sector, especially in adjacent areas. With numerous ongoing and upcoming projects, she anticipates significant housing demand spurred by the airport's workforce and related developments.

On his part, Emir Mujkic, Director and Senior Analyst of Insurance Ratings at the agency, spoke about the insurance sector in the region, expecting the sector to continue achieving good profitability and for insurance premiums to grow, supported by new projects in the region in general.

He also predicted an increase in car and property insurance prices, which will be reflected in higher insurance premiums overall.

News Source: Emirates News Agency