Bank expects UAE economic growth to improve to 3.4% in 2017
Emirates NBD on Wednesday reported a four percent rise in Q1 net profit to $509 million (AED1.87 billion).
Dubai’s largest bank said the profit increase was primarily driven by decline in expenses and provisioning for bad loans.
General and administrative expenses fell by 11 percent to AED1.12bn helped by a reduction in staff costs following the bank’s implementation of cost control measures last year. This is the fifth straight quarterly decline in staff costs, it said.
Impairment charges fell 23 percent to AED639m, compared with AED829m a year ago as net cost of risk improved.
Total income, however, slipped from AED3.6bn from AED3.9bn as net interest income dropped to AED2.48bn from AED2.55bn, driven by a contraction in its net interest margins.
Hesham Abdulla Al Qassim, vice chairman and managing director, Emirates NBD said: “Emirates NBD made an encouraging start to the year with a 4 percent growth in net profit and further strengthened its balance sheet, with improvements in credit quality and liquidity, coupled with strong capital ratios.”
In its outlook for 2017, Emirates NBD said it expected economic growth in the UAE to improve to 3.4 percent in 2017 as higher oil prices contribute to improved consumer and business sentiment and assists slightly higher government spending.
The bank expected the UAE’s growth to accelerate to 4.1 percent in 2018, with Dubai expected to enjoy stronger non-oil activity growth on the back of increased investment in infrastructure.
It said the anticipation of a 5 percent value added tax (VAT) to be introduced in early 2018 is likely to boost spending in the second half of 2017, as consumers bring forward purchases that otherwise would be made next year.