By Parag Deulgaonkar
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
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
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.