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Mon 22 Jul 2013 03:29 PM

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Dubai banking giant sees bad loans at 14-15%

Emirates NBD, Dubai's largest lender, revises down its forecast for non-performing loans

Dubai banking giant sees bad loans at 14-15%

Emirates NBD, Dubai's largest lender, has revised down its 2013 guidance for non-performing loans by 1 percentage point on the back of improved economic conditions in the emirate and benefits from its acquisition of BNP Paribas' Egyptian assets.

Bad loans as a proportion of the bank's total lending book will be 14-15 percent this year, instead of a previous estimate of 15-16 percent, Surya Subramanian, the bank's chief financial officer, told a media call on Monday.

NPLs stood at 13.9 percent at the end of the second quarter, down from 14.2 percent at the end of March.

Dubai was pummelled by a sovereign-linked debt crisis and the bursting of a local real estate bubble in 2009, which caused slower growth and higher provisioning at local banks. But in recent months, the emirate's economy has been rebounding.

The bank completed its first foreign purchase last month with the acquisition of the Egyptian assets of BNP Paribas.

Earlier on Monday, Emirates NBD said its second-quarter net profit rose 50 percent, beating analysts' forecasts, as Dubai's largest lender benefited from an economic recovery in the emirate.

ENBD, 55.6-percent owned by state fund Investment Corp of Dubai, made a net profit of AED972m ($264.6m) in the three months to June 30, compared with AED647m in the same period last year.

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