Dubai banks in focus; global cues weak

Dubai banks will be in focus after the emirate's two largest listed lenders reported second-quarter earnings
Dubai banks in focus; global cues weak
Dubai banks will be in focus after the emirates two largest listed lenders reported second-quarter earnings.
By Reuters
Mon 23 Jul 2012 11:06 AM

Dubai banks will be in focus on Monday after the emirate's two largest listed lenders reported second-quarter earnings, while cues from global markets are weak.

Emirates NBD's second-quarter net profit fell 13 percent to AED647m (US$176.15m), but this was above the average forecast analysts polled by Reuters.

"ENBD will take a hit - they beat estimates that were low-balled but the profits are down," says a Dubai-based trader who asked not to be identified.

The bank's loans and advances rose 2 percent in the second-quarter. Provisions dropped 3 percent in the quarter.

Lending in the wider UAE's banking system only grew by 0.3 percent in the first five months of the year, according to the latest figures from the country's central bank.

"A bank that does not grow its loan book is not one anyone would want to touch - let's hope markets overlook where it made the money from," the trader adds.

Rival lender Mashreq reported an 11.7 percent rise in quarterly profit, helped by a significant drop in provisions.

Elsewhere, Saudi construction firm Mohammad Al Mojil Group (MMG) has been suspended from trading after it failed to announce its second-quarter results on time, the Saudi Capital Market Authority said.

Pressure from a weak global backdrop may weigh on Gulf sentiment. Asian shares are down on Monday as Spain sparked concerns about its ability to stave off a sovereign bailout.

Brent crude slipped to US$105 per barrel on Monday as fears about the global economy returned to the forefront.

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