Dubai’s Emirates NBD Q1 Profit Rises 60%, Beats Estimates

Emirates NBD (ENBD), Dubai’s largest lender, posted a 60 per cent rise in first-quarter net profit on Wednesday, beating analysts’ forecasts as income from lending, fees and other products increased and provisions dropped.

The earnings growth is the steepest among the five banks that have reported so far in the United Arab Emirates.

The lender, 55.6-per cent owned by state fund Investment Corp of Dubai, made a net profit of Dhs1.67 billion ($454.67 million) in the three months to March 31, the bank said. This is up from Dhs1.04 billion in the same period of 2014.

That was ahead of the average estimate of four analysts polled by Reuters for a fourth-quarter net profit of Dhs1.46 billion.

ENBD’s performance has been lifted in recent quarters by strength in Dubai’s economy, where diversification has helped insulate banks from sluggish oil markets.

Net interest income reached Dhs2.49 billion, up by 11 per cent from the same period of last year. It cited an improvement in the performance of Islamic and retail assets and lower cost of funds for the climb.

The bank has been helped by an easing of debt woes. Emirates NBD’s fourth-quarter profit surged 82 per cent helped by its reclassification of its Dubai World debt as performing.

Impairment allowances reached Dhs1.1 billion at the end of the quarter, an improvement of 14 per cent from the same period of last year. A drop in impairment charges helped lift the bank’s coverage ratio for bad loans to 103.9 per cent at March-end, from 100.3 per cent in the earlier quarter.