Dubai bank Emirates NBD posts 15% Q1 profit rise, confirms CFO resignation

Emirates NBD, Dubai’s largest bank, reported a 15 per cent rise in first-quarter net profit as loan growth and improved margins offset an increase in provisions and operating costs, beating analysts’ expectations.

The bank said on Wednesday it made a net Dhs2.7bn ($735m) in the three months ended March 31, compared with Dhs2.39bn in the year-ago period.

SICO Bahrain had projected a net profit of Dhs2.54bn, while EFG Hermes predicted Dhs2.4bn.

Emirates NBD earlier this month raised a total of 621m pounds ($810m) from the sale of its stake in Network International in a London flotation.

Emirates NBD also said it would buy Turkey’s Denizbank from Russia’s Sberbank at a roughly 20 per cent discount to a previously agreed price, after a steep fall in the Turkish lira.

“We are already positive on the bank,” said Shabbir Malik, an analyst at EFG Hermes. “There are catalysts from the sale of Network International and the acquisition of (Turkey’s) Denizbank.”

Shares of Emirates NBD were down 0.8 per cent after the earnings, are up nearly 34 per cent year-to-date, outperforming a near 11 per cent gain in the benchmark Dubai index.

Emirates NBD, which is 55.6 per cent owned by state fund Investment Corp, and other banks in the United Arab Emirates benefited from a rise in interest rates in 2018.

The lender’s net interest margin grew 15 basis points from the corresponding period to 2.83 per cent.

Net interest income grew by 14 per cent during the first quarter, while non-interest income rose 18 per cent.

The bank said a 9 per cent increase in costs was due to investments in its digital transformation.

Emirates NBD also said its group chief financial officer Surya Subramanian had resigned to pursue family matters at home in Singapore.