My departure won't slow expansion, says Rick Pudner

Emirates NBD CEO says Dubai's biggest bank will continue growth abroad when he leaves job
Rick Pudner, the CEO of Emirates NBD.
By Reuters
Fri 26 Apr 2013 10:46 AM

The head of Dubai's largest bank, Emirates NBD, has said its ambition to expand abroad would not end with his departure at the end of the year.

The lender, which wants to make a fifth of its revenue outside the United Arab Emirates within five years, aims to complete a $500m purchase of BNP Paribas' Egyptian assets by the middle of May, Rick Pudner told reporters.

Pudner was speaking at the bank's first-quarter results conference call, days after ENBD announced he would leave the bank when his contract ends in December.

Speculation soon mounted over his likely successor, with bankers saying that if an experienced international industry figure was chosen, that would suggest ENBD was still keen to become a serious regional player.

A local appointment, on the other hand, might suggest the bank is tempering its foreign ambitions to focus on its local role.

Pudner, who has led ENBD since 2006, said his departure would not affect the bank's expansion plans, which include new representative offices in Asia and possible further acquisitions.

"I don't think you will see any change in direction as the strategy is supported by the board and (the new CEO) is very much a board decision," said Pudner.

A team has been established to advise the board on his successor.

ENBD, like Dubai, is recovering from the bursting of a real estate bubble and debt crisis that saw billions of dollars of debt at Dubai state-linked entities restructured.

The bank, which is majority-owned by state fund Investment Corp of Dubai, reported a 31 percent jump in first-quarter net profit on Thursday, beating an average analyst forecast, as impairments declined.

It made a net profit of AED837m ($227.9m) in the three months to March 31. The analysts had expected AED676m.

Bad loan provisions for the opening quarter stood at AED888m, down from AED1.1bn last year. The lender was hit hard by impairments in the latter half of 2011 and the first six months of 2012, which dragged down profits.

"Provisions were lower by 19 percent year on year and could have been lowered further had the bank not opted to add voluntarily to its general provisions," said Naveed Ahmed, senior financial analyst at Global Investment House in a note.

ENBD said it had repaid AED3bn of AED12.6bn it received in support from the United Arab Emirates government after the global financial crisis struck.

It priced a $750m subordinated bond in March, which was expected to help repay part of the aid.

Other UAE banks have also made repayments this year, including National Bank of Abu Dhabi and First Gulf Bank, as the capital instruments the support was converted into are diminishing in value.

Chief Financial Officer Surya Subramanian told reporters that the bank had no target date for paying off the remaining AED9.6bn, but said it could use its own cash or raise further funding from the bond market.

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