These are good times for UAE bankers as quarterly earnings hold up at the country's major lenders, despite the euro-zone crisis, the stuttering recovery in the United States and the slowdown of economic growth in China.
"Overall, the UAE banks have reported better than expected results [during the second quarter]," says Naresh Bilandani, a banking analyst at JPMorgan in Dubai.
Higher revenues, in particular fees from corporate customers, are the main driver. But dig below the positive top line and differences emerge.
An examination of the numbers shows Dubai banks are falling behind their peers in Abu Dhabi when the results are compared with the same period a year earlier.
Emirates NBD, Dubai's biggest bank by market value, reported a 13 per cent decline in profits to Dh647 million (US$176.1m), its fourth quarterly drop in a row.
Commercial Bank of Dubai'sfirst-half profits slipped 7.2 per cent as provisions rose.
The capital's banks fared better. Most impressive was First Gulf Bank, which reported a 14 per cent jump in profits in the three months to last month.
National Bank of Abu Dhabi (NBAD), the largest of the country's lenders, reported a 2 per cent rise in quarterly profit, helped by a stronger return on its assets.
Income from interest payments bolstered Abu Dhabi Commercial Bank's (ADCB) performance, even though quarterly profit was 45 per cent lower because of a one-off gain booked in the same period of last year from the sale of a 25 per cent stake in RHB Capital, a Malaysian investment bank.
"It's a tale of two cities," says Timucin Engin, the associate director, financial services at Standard & Poor's in Dubai. "Abu Dhabi banks have less asset quality deterioration and have higher lending growth."
The two-speed recovery, say analysts, has its roots in the financial crisis of 2008 and 2009.
Before the crisis broke, local banks, in particular Dubai lenders, were galloping along at a double-digit clip, fuelled by profits from lending to companies linked to the Government that engaged in ambitious property projects and global acquisitions.
The downturn that followed required a painful combination of haircuts and write-offs.But the after effects still linger.
Dubai Holding, the personal investment vehicle of Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, is one of several companies in the emirate still to agree to debt restructuring deals with lenders.
Emirates NBD took a further Dh370m provision for Dubai Holding in the second quarter, Ben Franz-Marwick, the head of investor relations at the bank, said last week. It means the bank has now taken provisions against almost a third of its Dh4.6 billion exposure.
Emirates NBD, which is 55.6 per cent owned by the Investment Corporation of Dubai, has been one of the leading lenders to the government sector in recent years.
In contrast, Abu Dhabi banks are benefiting from strong state spending by the emirate's Government.
Potential financing opportunities have arisen since the approval in January of a raft of developments, ranging from Abu Dhabi International Airport's Midfield Terminal to housing projects.
Higher-quality assets on their books means Abu Dhabi banks have been under less pressure to build provisions.
NBAD's provisions dropped 12 per cent in the second quarter from a year earlier. Provisions plunged 47 per cent over the same period for ADCB.
Analysts are warning that banks are likely to be hit by more soured loans before the end of the year. Levels of non-performing loans are expected to edge up as a result.
"Where debt restructuring negotiations have not been concluded, banks are exposed to the risk that final terms trigger a higher provisioning requirement. Investors may feel uncomfortable with this uncertainty," says Rahul Shah, a banking analyst at Deutsche Bank in Dubai.
Partly for this reason lending is likely to remain behind elsewhere in the region.
Lending in the UAE accelerated by a meagre 0.3 per cent in the first five months of the year. Credit growth in Saudi Arabia is rising much faster, expanding 13 per cent across the same period.
What little loan growth there is will continue to stem from Abu Dhabi. First Gulf Bank's lending rose 6.1 per cent in the second quarter from the previous quarter.
In contrast, Emirates NBD's lending edged up 2 per cent over the same period.
Despite the difference between emirates, however, UAE bankers have reason to be pleased with delivering a positive set of results during a rocky period for the global financial industry.