Emirates NBD, the Dubai lender buying BNP Paribas’ Egyptian business, on Thursday posted fourth-quarter net profit that more than tripled on the back of lower impairments and increased non interest income, beating analysts’ forecasts.
The lender, 55.6-per cent owned by state fund Investment Corporation of Dubai, made a net profit of Dhs625 million ($170.16 million) in the three months to December 31, a statement from the bank said, compared with Dhs152 million in the same period last year.
An average of five analysts polled by Reuters forecast a net profit of Dhs484 million for the quarter.
Full-year profit for 2012 also rose, reaching Dhs2.55 billion against Dhs2.48 billion in 2011.
Like other large Gulf banks, ENBD is seeking to expand its regional footprint through acquisitions as it seeks new markets to drive growth. In December, ENBD announced it would purchase the Egyptian business of French lender BNP Paribas for $500 million in a first step towards diversifying its business away from its Dubai base.
The lender has been heavily hit by impairment allowances in recent quarters – particularly in the latter half of 2011 and the first six months of 2012 – which dragged down profits at the bank, with exposure to indebted Dubai state-linked entities among the main reasons.
Provisions for the final three months of 2012 period stood at 940 million dirhams, down from the Dhs1.06 billion the bank recorded in the corresponding period of 2011.
This took impairment allowances for 2012 to Dhs4 billion, below the Dhs4.98 billion the bank set aside for bad loans in the previous year.
ENBD also booked a profit from associates of Dhs37 million for the fourth quarter of 2012, versus a loss of Dhs227 million in the same period of 2011. The bank attributed the swing to the absence of any provision against Union Properties, in which it owns a 47.6 per cent stake, after a Dhs750 million impairment in 2011.
Loans and advances gained three per cent in the fourth quarter, taking growth for 2012 to seven per cent. This exceeds the 5-6 per cent forecast given by Chief Executive Rick Pudner in October.
Meanwhile, deposits increased 11 per cent over the course of 2012. By comparison, figures from the UAE Central Bank said sector-wide deposits grew 8.7 per cent in the first ten months of the year.
ENBD said on Wednesday its board had proposed a cash dividend of 25 percent for 2012, up from 20 percent for 2011.
Its Dubai-listed shares have risen 33.3 percent year-to-date. They are yet to trade on the bourse Thursday.