Banks report record earnings for 2003

DUBAI - In the UAE some banks saw their yearly profits for the year 2003 achieve record performance and even the first quarter of 2004 stood up from the past level as there is a boom in the local economy due to massive infrastructure development and the successful World Bank meeting held in Dubai.

By Moushumi Das Chaudhury

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Published: Sat 24 Apr 2004, 12:15 PM

Last updated: Wed 1 Apr 2015, 11:52 PM

Last year, banks also collected more money as deposits in the wake of return of funds kept in overseas banks.

The Central Bank figures showed the bulk of the increase in the deposits in the form of individual deposits although deposits controlled by the government and other public institutions also showed moderate increases.

According to Suresh Kumar, general manager of Emirates Financial Services: "There are various factors responsible for great success in the banking sector, one of them is the profitable business related to investment management. A separate division and new companies were launched by some banks to manage investments of high networth individuals and institutions who found that the arrangement ensured significant savings for themselves while their capital was managed more efficiently."

The unaudited profits of the Commercial Bank of Dubai (CBD) for the first quarter of this year stood at Dh74.48 million, up from the level of Dh69.62 million for the corresponding period last year.

The total assets of the company were placed at Dh8.80 billion, up from the previous Dh7.01 billion.

The Union National Bank (UNB) continued to grow this year wioth net profit of Dh105.14 million which is an increase of 15.21 per cent against the figure for the same period last year.

According to one senior bank official, The huge profits generated by banks in 2003 and the first quarter of 2004 is also related to the Mortgage financing market.

Some of the banks shed their reservations and entered this sector and made profits by providing loans for residential projects and the prominent banks includes, HSBC, Mashreq bank and National bank of Ras Al Khaimah who have entered the arena of home finance and offers various options both for the nationals and the expatriates.

Amlak, the pioneer of home financing business, paved the way to banks and they started providing home loans to nationals and expats, this way it boosted the profits in the banking sector.

According to one business relationship manager of Commercial Bank of Dubai: "The huge profits made by banks in the UAE has also been posible as most of the banks are offering their account holders other saving schemes, such as education plan, home loans, discount in shopping malls and car financing at low interest rates."

"Alongwith this, there are other security in depositing money in the banks. More the number of customers, more is the business and it has created a success story," he added.

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