Emirates NBD’s Q3 net profit rises 7 per cent on higher net income interest

Emirates NBD (ENBD), Dubai’s largest lender, on Tuesday posted a 7.1 per cent rise in third-quarter net profit, beating analyst forecasts, as earnings were boosted by higher net interest income.

The lender, 55.6-per cent owned by state fund Investment Corporation of Dubai, made a net profit of Dh1.67 billion in the three months to September 30, compared to Dh1.56bn in the same period in 2014, according to Reuters calculations.

ENBD didn’t provide a quarterly breakdown in its results filing, so Reuters calculated figures for the three months using previous financial statements.

An average of four analysts polled by Reuters forecast the bank to make a net profit of Dh1.60bn for the third quarter.

ENBD has reaped the benefits of a robust Dubai economy in recent years as the emirate has made progress in resolving its debt woes. But pressure from lower oil prices has squeezed deposits across the banking system in recent months and generally lifted the sector’s loan-to-deposit ratio.

Chief executive Shayne Nelson in February forecast annual loan growth of between 5 and 7 per cent in 2015 and for the coming year to be “very profitable”.

For the nine-month period, net profit rose to Dh4.99bn, up from Dh3.91bn in the year earlier period, according to the statement.

Over the same time period, net interest income grew 8 per cent to Dh7.6bn, while non-interest income declined by 7 per cent to Dh3.6bn.

Loans and advances stood at Dh261.6bn at the end of September, up from Dh247.7bn at the same point last year.

A significant amount of the bank’s provisioning in recent quarters has been towards boosting the bank’s bad loans coverage ratio, which improved to 115.3 per cent at the end of September, up from 70.3 per cent at the same point of 2014.

Meanwhile, deposits increased 8 per cent over the same period, standing at Dh269.3bn on September 30.

($1 = 3.6727 UAE dirham)

(Reporting By Tom Arnold)

Share This Post