EBI, NBD post double-digit growth

Emirates Bank International (EBI) and National Bank of Dubai (NBD) posted double-digit profit growth on more corporate and consumer lending in the last quarter before they combined to create Emirates NBD, the Gulf's largest bank by assets.

Emirates NBD plans to grow its lending business in the UAE and expand in the Middle East, mainly in neighbouring Gulf Arab states, through acquisitions and new branches, Chief Executive Rick Pudner said.

The combined lender, with assets of 228 billion dirhams ($62.09 billion), made a profit of 2.57 billion dirhams in the nine months ended September 30, Emirates NBD said in a statement.

"There was core lending growth across the board during the quarter," Pudner told Reuters by telephone.

The banks were able to boost lending by combining retail banking products, including offering credit cards to customers who take out personal loans or car loans, he said.

Excluding income related to initial public offering (IPO) financing, which had boosted profit during a stock market rally in 2005, earnings from lending rose 60% in the nine months, Pudner said.

NBD's nine-month net interest income grew 32.7% to 1.2 billion dirhams, Emirates NBD said, without giving quarterly data.

"We saw robust cross-selling with a lot of existing customers in the quarter," Pudner said.

Gulf Arab states have reaped a windfall from oil prices that have risen almost fivefold in the last six years, spurring economic growth, and more business for local and international lenders.

Emirates NBD, created at the behest of Dubai's ruler, has about a fifth of total asset loans and deposits in the UAE, the world's sixth-largest oil exporter.

The lender, created to form a bank large enough to meet the demands of a rapidly growing economy, would seek to expand into Kuwait and other Gulf Arab markets through acquiring majority stakes in existing lenders or opening branches, Pudner said.

Emirates NBD expected to start operations in Saudi Arabia, the world's largest oil exporter and home to 24 million people, before the end of the year, Pudner said in May. The lender also has a licence from the Qatar Financial Centre.

"We certainly believe there is a need for a major regional bank in the next two to five years," said Pudner, who was formerly chief executive of Emirates Bank.

"Ideally, we'd try to look for majority control. We are constantly looking for opportunities to expand in the region, and GCC is the focus," Pudner said.

Emirates Bank, the larger of the two, posted a 46.8% rise in third-quarter profit to 578 million dirhams, according to Reuters calculations from nine-month profit of 1.78 billion dirhams.

The quarterly earnings beat the 498 million dirham profit forecast of MacSharaf Securities in a Reuters survey last month.

NBD's third-quarter profit rose 28.4% to 322.81 million dirhams in the third quarter, Reuters calculated from nine-month profit of 974 million provided by the lender.

Analysts' earnings forecasts for NBD's earnings ranged from 292.4 million dirhams to 431 million dirhams in the survey. - Reuters

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