Dubai’s biggest lender, Emirates NBD, posted a jump of 61 percent in third-quarter earnings, beating forecasts, as impairment charges slumped on a recovering economy and demand for retail financing surged.
UAE bank earnings are recovering from the lows of the pandemic last year when shutdowns and travel curbs hammered the economy.
S&P expects Dubai’s economy to expand by 3.5 percent this year, mainly because of a high vaccination rate - with more than 85 percent of the UAE population having received two doses - and the easing of COVID-19 global restrictions.
Dubai’s economy shrank 10.9 percent last year, it said.
The bank reported a net profit of 2.505 billion dirhams ($682 million) in the quarter that ended Sept. 30, up from 1.556 billion in the year-earlier period.
Impairment charges on financial assets almost halved to 1.15 billion dirhams.
Net interest income was slightly lower as low interest weighed, but net income from Islamic financing and investment products almost doubled to 706 million dirhams.
The net profit exceeded forecasts by CI Capital, which had projected 2.4 billion dirhams and EFG Hermes, which had a forecast of 2.08 billion dirhams.
Nine-month net profit rose 29 percent to 7.3 billion dirhams from a year earlier, as the bank cited strong underlying business momentum with record demand for retail financing.
“Emirates NBD’s growth in income and profitability in the third quarter of 2021 is a clear sign of improving economic conditions within the region,” said Hesham Abdulla al-Qassim, the bank’s vice chairman in a statement.
Group CEO Shayne Nelson said the bank is using its balance sheet strength to support its customers, helping them to benefit from the growing economy as world fair Expo 2020 Dubai began in October.
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