The financial performance of UAE corporate entities will strengthen this year as the economy emerges from the downturn and profitability, which eluded key sectors last year, returns on the back of gross domestic product (GDP) growth. According to Minister of Economy Sultan Bin Saeed Al Mansouri, economic growth will more than double this year to 3.2 per cent as oil prices strengthen and business activity increases. The government is taking steps to ensure growth, including an update of the company’s law to allow non-locals to hold a higher stake in their businesses and a draft law to protect the interests of foreign investors.
UAE banks will improve their performance this year after a 21 per cent drop in aggregate profits last year as the incidence of non-performing loans eases, analysts said. The other sector that was negatively affected in 2009, real estate and construction, is expected to begin the process of normalisation, but will likely take longer to return to profitability, they said. Net earnings at real estate companies in the UAE saw an aggregate erosion of almost 75 per cent last year, according to data collated by Kuwait-based Global Investment House.
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