Now Reading
Emirates NBD posts 8% Q1 net profit gain

Emirates NBD posts 8% Q1 net profit gain

The bank’s performance was aided by smaller provisions for bad loans

Emirates NBD, Dubai’s largest lender, posted an 8 per cent rise in first-quarter net profit on Tuesday, aided by smaller provisions for bad loans.

The first major lender in the United Arab Emirates to announce its earnings said it made a net profit of Dhs 1.81bn ($492.8m) in the three months to March 31, a statement from the bank said, compared to Dhs 1.67bn in the corresponding period of 2015.

Analysts at EFG Hermes and SICO Bahrain had forecast the bank would make a net profit for the quarter of Dhs 1.87bn and Dhs 1.93bn respectively.

The bank, 55.6 per cent owned by state fund Investment Corp of Dubai, has benefited from an improvement in the performance of its assets in recent quarters as Dubai government-linked companies have made progress in resolving debt troubles which hamstrung the emirate at the turn of the decade.

The amount of cash set aside for bad loans was Dhs 829m in the first quarter, down from Dhs 1.1bn in the same period of 2015.

A 3 per cent increase in net interest income to Dhs 2.56bn was also a positive for the bank and helped to offset a 16 per cent jump in operating expenses, which ENBD said was due to higher staffing costs linked with increase business volumes.

As the bank with the closest ties to the Dubai government, ENBD’s performance is heavily linked to the fortunes of the emirate’s economy. This has been showing signs of strain in recent months as volatility in financial markets and low oil prices weigh on sentiment.

Reflecting the tougher operating conditions, the bank forecast in January that loan growth would slip to a mid-single digit percentage in 2016, from 10 per cent in 2015.

However, loans and advances stood at Dhs 279.1bn at the end of March, up 12 per cent at the same point last year. Deposits rose by the same percentage year-on-year, to Dhs 290.9bn.

© 2020 MOTIVATE MEDIA GROUP. ALL RIGHTS RESERVED.

Scroll To Top