Dubai's Emirates NBD Q2 Net Profit Jumps 34.8%, Beats Estimates
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Dubai’s Emirates NBD Q2 Net Profit Jumps 34.8%, Beats Estimates

Dubai’s Emirates NBD Q2 Net Profit Jumps 34.8%, Beats Estimates

The lender made a net profit of Dhs1.31 billion in the three months to June 30.

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Emirates NBD, Dubai’s largest lender, on Thursday posted a 34.8 per cent jump in second-quarter net profit, beating analysts’ forecasts despite a significant hike in impairments.

The lender, 55.6-per cent owned by state fund Investment Corp of Dubai, made a net profit of Dhs1.31 billion in the three months to June 30, Reuters calculated, compared to Dhs972 million in the same period last year.

An average of six analysts polled by Reuters forecast a net profit of Dhs1.09 billion for the second quarter.

ENBD didn’t provide a quarterly breakdown in its first-half results filing, so Reuters calculated figures for the three months to June 30 using previous financial statements.

The bank’s earnings performance has been boosted in recent quarters by improved economic conditions in Dubai, which has recovered from a deep financial crisis on the back of a rebound in the key real estate sector.

Impairments, which have been a major drag on the bank’s profitability, have stayed high although chief executive Shayne Nelson said in April that the buoyant local economy would allow it to keep boosting profits and its bad loan coverage ratios without the need for severe provisioning.

Despite this, provisioning remained elevated in the second quarter, climbing 34.4 per cent year-on-year to Dhs1.34 billion, according to Reuters calculations.

The bank’s bad loans coverage ratio improved to 64.7 per cent at end-June, the statement said, up from 52.7 per cent at the same point of 2013 and four percentage points higher than the figure at the end of the first quarter.

ENBD was still able to post a big rise in profits as both net interest income and non-interest income grew – 21.6 per cent to Dhs2.33 billion and 46 per cent to Dhs1.47 billion respectively, according to Reuters calculations.

Total loans stood at Dhs241.8 billion at the end of June, up 1.4 per cent on the end of 2013. Deposits increased 5.5 per cent over the same timeframe, standing at Dhs252.9 billion on June 30.


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