Today our UAE banking analyst, Shabbir Malik, took a deep look at the UAE banking sector and sees limited share price upside from here for now. “We downgrade ADCB to Neutral from Buy, on the back of the recent rally and our concerns on credit quality in the retail segment. We downgrade FGB & NBAD to Neutral, as we believe the positives of the merger are now priced in. A better entry point may arise around the de-listing of FGB at end-1Q17 and payment of its DPS on 8 March. We would also pursue a better entry point in DIB (currently Neutral), as we see it as an alternative to ENBD to play Dubai’s macro story, and as we see it as a key beneficiary of Dubai’s aspiration of becoming a global Islamic hub. We reiterate our Buy on ENBD, as we i) see scope for further provision reversals; ii) are encouraged by its dynamic cost management; and iii) find its valuation compelling.” Please click here for the full report (Shabbir Malik, Rajae Aadel)