Dubai's Emirates NBD Q3 net profit doubles to $424.7m

Growth as a result of a resurgence in the Dubai economy, which has been boosted by a strengthening property market and a scaling down of debt troubles
Dubai's Emirates NBD Q3 net profit doubles to $424.7m
By Reuters
Wed 22 Oct 2014 10:03 AM

Emirates NBD, Dubai's largest lender, beat analysts' forecasts on Wednesday as it reported a doubling of third-quarter net profit, aided by a fall in provisioning.

The lender, 55.6 percent owned by state fund Investment Corp of Dubai, made a net profit of AED1.56 billion ($424.7 million) in the three months to September 30, a statement from the bank said, compared to AED775 million in the same period last year.

An average of five analysts polled by Reuters forecast a net profit of AED1.16 billion for the third quarter.

ENBD's earnings have been given a lift in recent quarters by a resurgence in the Dubai economy, which has been boosted by a strengthening property market and a scaling down of debt troubles after a severe financial crisis.

In the third quarter, impairment allowances worth AED1.22 billion were allocated, down from the AED1.52 billion recorded in the same period of 2013.

Much of the bank's provisioning in recent quarters
has been towards boosting the bank's bad loans coverage ratios, which improved
to 70.3 percent at end-September, up from 54.8 percent at the same point of
2013.

Meanwhile non-interest income - revenue earned
from fees and commissions - jumped 55 percent year-on-year in the third
quarter to AED1.38 billion. Net interest income also grew by 9 percent
over the same timeframe to AED2.47 billion.

"It is very pleasing that each part of the
business was able to deliver year-on-year revenue growth," said group
chief executive Shayne Nelson in the statement.

Banks have been gradually ramping up lending
activity in recent quarters as a rebound in property prices help support
lenders' risk appetite, with loan growth up 7.2 percent year-on-year in August,
according to the latest data from the United Arab Emirates central bank.

ENBD's lending growth slightly trailed the system
figure, with an increase of 6 percent. Total loans stood at AED247.7 billion at September 30, 2014.

Deposits increased by 9 percent to AED249.7 billion, compared to AED228.6 billion at the some point of 2013.

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