- The first nine months of 2006 has not been very rosy for the UAE banking sector, like seen in the year 2005. This is primarily because of the reduced fee and commission income, which saw a decline during the first nine months due to the slowdown in capital market activity. However, the income from core banking activities has been healthy during the first nine months of 2006 which further substantiates our view that core income is likely to drive earnings growth going forward.
- In the first nine months of 2006, the net interest income of the banks under review reached AED8.23bn as compared to AED6.23bn during the same period corresponding year, registering a growth of 28.0%. On a q-o-q, the net interest income of the banks under review was AED2.73bn in the third quarter of 2006 as compared with AED2.34bn during the same period in corresponding year, registering a growth of 16.3%. Net income for the UAE banks under review reported a marginal growth of 1.4% during the first nine months of 2006.

Comment: The income from core banking activities has been healthy during the first nine months of 2006, and thats because of the reduced fee and commission income.