Dubai’s Emirates NBD Q1 net profit jumps 25 pct
An average of six analysts polled by Reuters forecast a net profit of $246.2 million for the first quarter
Emirates NBD, Dubai’s largest lender, beat analysts’ forecasts on Thursday with a 25 percent jump in first-quarter net profit as higher interest and fee income outstripped a jump in provisions.
The lender, 55.6-percent owned by state fund Investment Corp of Dubai, made a net profit of $283.7 million in the three months to March 31, a bourse filing said, compared to $227.9 million in the same period last year.
An average of six analysts polled by Reuters forecast a net profit of $246.2 million for the first quarter.
The bank cited healthy growth in both net interest income and non-interest income, which climbed 28 percent and 25 percent respectively, for the rise in profits.
UAE banks in general have recorded impressive growth in the first quarter, continuing the trend from 2013, as the local economy rebounds from a real estate crash and debt problems at Dubai government-linked entities.
ENBD’s first-quarter profit would have been greater if it were not for the 43 percent year-on-year jump in provisioning.
The bank set aside $345.8 billion in the three months to March 31 to cover bad loans, which it attributed to continued conservative provisioning to increase its coverage ratio - which rose to 60.7 percent from 51.4 percent in the year-ago period.
Provisions, which have been a major drag on the bank’s profitability in recent years, have continued to remain high despite the improving local economy, with earnings in the final quarter of 2013 trimmed by a 40 percent leap in impairments.
Loans and advances stood at $652.7 million at the end of March, up 9 percent on the same point last year. Chief Financial Officer Surya Subramanian said in January the bank was expecting loan growth of 7-8 percent in 2014.
Meanwhile, deposits increased 13 percent over the same timeframe, standing at $186.million on March 31.