Emirates NBD Q3 Net Profit Doubles, Beats Forecasts
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Emirates NBD Q3 Net Profit Doubles, Beats Forecasts

Emirates NBD Q3 Net Profit Doubles, Beats Forecasts

ENBD’s earnings have been given a lift in recent quarters by a resurgence in the Dubai economy.

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Emirates NBD reported a doubling of third-quarter net profit on Wednesday, beating estimates as lower provisions and higher income bolstered earnings at Dubai’s largest bank.

The lender, 55.6 per cent owned by state fund Investment Corp of Dubai, made a net profit of Dhs1.56 billion ($424.7 million) in the three months to September 30, a statement from the bank said, compared to Dhs775 million in the same period last year.

The figure well exceeded the average forecast of five analysts polled by Reuters, who expected the bank to make a net profit of Dhs1.16 billion.

ENBD’s earnings have been given a lift in recent quarters by a resurgence in the Dubai economy, which has been boosted by a strengthening property market and a scaling down of debt troubles after a severe financial crisis.

In the third quarter, impairment allowances worth Dhs1.22 billion were allocated, down from the Dhs1.52 billion recorded in the same period of 2013.

Much of the bank’s provisioning in recent quarters has been towards boosting the bank’s bad loans coverage ratios, which improved to 70.3 per cent at end-September, up from 54.8 per cent at the same point of 2013.

Meanwhile non-interest income — revenue earned from fees and commissions — jumped 55 per cent year-on-year in the third quarter to Dhs1.38 billion. Net interest income also grew by nine per cent over the same timeframe to Dhs2.47 billion.

“It is very pleasing that each part of the business was able to deliver year-on-year revenue growth,” said group chief executive Shayne Nelson in the statement.

Banks have been gradually ramping up lending activity in recent quarters as a rebound in property prices help support lenders’ risk appetite, with loan growth up 7.2 per cent year-on-year in August, according to the latest data from the United Arab Emirates central bank.

ENBD’s lending growth slightly trailed the system figure, with an increase of six per cent. Total loans stood at Dhs247.7 billion at September 30, 2014.

Deposits increased by nine per cent to Dhs249.7 billion, compared to Dhs228.6 billion at the same point of 2013.


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