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Dubai’s Emirates NBD sees Q2 profit surge 30%

Dubai’s Emirates NBD sees Q2 profit surge 30%

Banks in the United Arab Emirates are expected to benefit this year as economic growth recovers

Emirates NBD (ENBD), Dubai’s largest lender, posted a 30 per cent rise in second-quarter net profit on Wednesday, boosted by a climb in net interest income and a drop in provisions to cover bad loans.

The bank made a net profit of Dhs2.63bn ($716.1m) in the three months to June 30, it said in a statement, compared with Dhs2.02bn in the corresponding period of 2017.

That was ahead of two analysts’ forecasts. SICO Bahrain forecast the bank would make a net profit for the quarter of Dhs2.31bn, while EFG Hermes expected a profit of Dhs2.14bn.

Banks in the United Arab Emirates are expected to benefit this year as economic growth recovers and investment in infrastructure picks up ahead of Dubai’s hosting of the World Expo in 2020.

Emirates NBD, 55.6-per cent owned by state fund Investment Corp, was boosted by a 20 per cent rise in net interest income to Dhs3.25bn compared with the same period a year earlier.

That helped offset a 3 per cent dip in non-interest income to Dhs1.10bn as income from investment securities dropped.

Reflecting improved economic conditions, provisions for bad loans eased by 49 per cent to Dhs315m.

With existing overseas operations in several countries including Egypt, India, Saudi Arabia, Singapore, Britain, Indonesia and China, Emirates NBD expanded its international operations in May by agreeing to buy Turkey’s Denizbank from Russia’s state-owned Sberbank for $3.2bn.

Read: Dubai’s Emirates NBD to acquire Turkey’s DenizBank for $3.19bn

The bank said a 21 per cent increase in costs during the quarter was due to higher staff and IT costs related to its digital and technology transformation, as well as higher costs related to international branch expansion.

The bank’s loan and deposit portfolio increased marginally at the end of June. Loans rose by 4 per cent to Dhs316.4bn, while deposits increased by 3 per cent Dhs335bn.

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