DUBAI: Emirates NBD, Dubai's largest bank by market value, on Monday said third-quarter net profit more than tripled on the back of lower provisioning for bad loans and higher non-interest income, beating analysts' forecasts.
The lender, 55.6 percent owned by state fund Investment Corporation of Dubai, made a net profit of 640 million dirhams ($174.2 million) in the three months to Sept. 30, compared with 175 million dirhams in the same period last year, a statement from the bank said.
An average of four analysts polled by Reuters had forecast a net profit of 514.4 million dirhams.
Impairment allowances, the amount set aside to meet bad loans, stood at 1.01 billion dirhams for the third quarter, down 36 percent from the 1.57 billion dirhams which the bank recorded in the same three months of 2011.
The lender was hit hard by impairment allowances in the previous four quarters, dragging down profits at the bank. Exposure to indebted Dubai state-linked entities was one of the main reasons.
ENBD made just over 2 billion dirhams of provisions in the first six months of this year.
Non-interest income climbed 21 percent in the third quarter to 790 million dirhams, driven by higher investment securities income and a 5 percent improvement in core fee income across most areas, the bank said.
Loans and advances have gained 5 percent since the start of 2012, while deposits increased 11 percent over the first nine months of this year. The former had grown 2 percent and the latter 8 percent in the first six months.
For all banks in the United Arab Emirates, combined lending was flat at the end of August compared to the end of the second quarter, according to the latest central bank figures. System-wide deposits rose 1.1 percent month-on-month in August after a gain of 0.7 percent in July.
Dubai Bank, which ENBD was obliged to take over last year after the Islamic bank buckled under the weight of its bad loans, will be fully integrated by year-end, with branches rebranded as ENBD's own Islamic arm, Emirates Islamic Bank.
Shares in ENBD closed on Sunday flat compared to their level at the start of this year. The main Dubai stock index has gained 21.9 percent year-to-date. ($1 = 3.6730 UAE dirhams) (Reuters)
