By Neeraj Gangal
Net profit for quarter ended March 31 was AED1.41bn ($385m), compared to AED1.1bn in year-earlier period
Emirates NBD, UAE's biggest bank by assets said its first quarter profit rose 27 percent, on the back of a stake sale of its card processing unit.
Net profit for the quarter ended March 31 was AED1.41bn ($385m), compared to AED1.1bn in the same period last year, the Dubai government-controlled bank said in a statement on Tuesday.
During the quarter, Network International, a card processing unit of Emirates NBD sold its 49 percent stake to private equity firm Abraaj Capital for a price of $539m, which included a sum contingent upon attainment of profitability targets and a portion financed by Emirates NBD, as is normal in such transactions.
“As a result of this transaction, Network International was accounted for as a jointly controlled entity from the start of 2011 and a gain on the transaction of AED1.8bn was recognised during Q1 2011,” Emirates NBD said.
The bank’s Earnings per Share (EPS) increased 29 percent to AED0.24 per share, from AED0.19 per share in the first quarter of 2010.
However, other indicators showed a slowdown - customer loans slipping one percent during the quarter from the fourth quarter of 2010 - while the bank’s deposits grew six percent from the end of 2010.
The bank’s impairment allowances on financial assets and on loans showed an increase, standing at AED2.8bn at the end of March, increasing by AED628m during the first quarter.
“During the first quarter of 2011 we have continued to deliver stable and robust financial results. The quarter witnessed the formalisation of the Network International transaction and the resultant gain demonstrates the value we are able to create and realise for our shareholders, Emirates NBD’s chief executive officer, Rick Pudner, said in the statement.
"From an operational perspective, the quarter has importantly seen a return to top-line growth across both net interest and core fee income categories.”
Customer deposits at the UAE’s 51 banks have risen 2.8 percent this year through February to AED1.1 trillion ($294bn), compared with a 6.8 percent rise in 2010, Bloomberg reported earlier this month, citing central bank data.
It is so easy to make profit if the bank change the contractual agreement as they wish... How many persons has found their interest for the HOME LOAN changed till double!!
On August 2010, they replaced the EBOR with their CBR (that till now noboby has given to me the reasons and how it is calculatated). Now as per my contract should I pay EBOR + 3.5%, where the EBOR is at 2.35%, but the bank charge me CBR+3.5, where the CBR is 4.5%. I'm given to the bank every month 2,000 AED that are not due!! and they told me pay or jail!! How you call this?
Business as usual?
Seriously, you knew the legal framework in Dubai, or lack of hat allowed changes to the contract. You knew the debtor regulations. You knew that the RE bubble was not sustainable in the long run. And still... you signed.
I agree that this is not the best way to rebuild trust, and that by protecting certain interests in the short term we are threatening the long term. Nothing new here, in the 5 or 6 years I have been here I have only seen dshort-temr thinking. Not new.
Sorry but I can feel no sympathy. When people like me where discussing the downside possibilities we were gleefully ignored as "not getting it". Maybe next time you will do a better due diligence.