Leading Dubai banks maintain strong profit growth in the first half

Wednesday, Jul 15, 2015Improvement in asset quality reflected in declining provisions and better NPL coverageImprovement in asset quality reflected in declining provisions and better NPL coverageDubai: Three leading Dubai based banks reported strong growth in their 2015 first half earnings on Wednesday supported by increase in interest and non-interest income streams, and lower impairment charges.

Gulf News

July 15, 2015

Wednesday, Jul 15, 2015

Improvement in asset quality reflected in declining provisions and better NPL coverage

Dubai: Three leading Dubai based banks reported strong growth in their 2015 first half earnings on Wednesday supported by increase in interest and non-interest income streams, and lower impairment charges.

Emirates NBD reported a net profit of Dh3.3 billion for the first half of 2015, up 41 per cent compared to the first six months of 2014.

For the second quarter of the year ENBD’s net profit was up 26 per cent year on year at Dh1.65 billion.

The bank’s net interest income grew 9 per cent to Dh5 billion due to growth in retail assets and a lower cost of funds.

“We have delivered another strong set of financial results, with healthy levels of growth in both income and profit. We remain cautiously optimistic for the remainder of 2015,” said Shayne Nelson, Group Chief Executive Officer of Emirates NBD.

Emirates Islamic, the Islamic bank belonging to Emirates NBD Group also reported strong set of numbers for the first six months of 2015.

The bank’s a net profit for the first half of the year was up 97 per cent to Dh447 million compared to the same period last year.

Mashreq posted a net profit of Dh1.3 billion for the first half of 2015, up 11.6 per cent compared to the same period last year. The bank’s operating income was up 5.7 per cent year-on-year at Dh3 billion.

All three institutions showed improvement in asset quality with steady decline in provisions and improved non-performing loans coverage.

During the first half, ENBD’s impaired loan ratio improved to 7.4 per cent from 7.9 per cent at the end of 2014. The impairment charge in the first half of 2015 at Dh1.98 billion is 24 per cent lower than in corresponding period of 2014.

Emirates Islamic’s non-performing financing receivables are at 7.6 per cent. The bank has also improved its coverage ratio to 106 per cent.

Mashreq’s NPLs remained stable at Dh2.8 billion at the close of the first half of the year with NPLs to gross loans ratio of 3.7 per cent. Total provisions for loans and advances reached Dh 3.7 billion, constituting 138.4 per cent coverage for NPLs as on June 30, 2015.

By Babu Das Augustine Banking Editor