Thursday, Oct 24, 2013
Dubai: Emirates NBD reported a net profit of Dh2.6 billion for the nine months ended September 30, 2013 up 34 per cent, compared with Dh1.9 billion in the same period of 2012.
While total income of the bank at Dh8.7 billion was up 13 per cent in the first nine months of 2013 from the comparable period in 2012.
“The results have been in line with our guidance. During the first nine months of 2013, we have delivered a strong set of financial results with net profit for the period up by 34 per cent compared to the same period in 2012. This is testament to our ability to take advantage of the improving economic backdrop in the UAE, and Dubai in particular,” said Rick Pudner, Emirates NBD’s Chief Executive Officer.
For the third quarter of the year, net income rose to Dh775.09 million from Dh640.09 million in the third quarter last year. Net interest income rose 18 per cent quarter on quarter and 30 per cent year on year helped by increased volumes in higher yielding retail products, declining Emirate Interbank Offered Rate (EIBOR), cheaper bank borrowings, more efficient capital structure and contribution business in Egypt.
“ENBD reported a robust growth in bottom-line mainly due to increase in net interest income, fee income and one-off gains from disposal of 32.6 per cent stake in Union Properties during the period; the acquisition of the Egyptian subsidiary in 2Q13 also had its impact,” Naveed Ahmad, Manager, Research Group, Global Investment House.
In the third quarter, the bank’s impairment provisions jumped 50 per cent from a year ago to Dh1.52 billion. Provisions now cover 54.8 per cent of bad loans compared with 48 per cent a year ago and the bank’s full-year target of 55 per cent to 60 per cent. “Conservative provisioning in line with guidance for the year which resulted in increasing the coverage ratio by over 2 per cent to 54.8 per cent,” said Surya Subramanian, Emirates NBD’s Chief Financial Officer.
The impairment charge primarily includes “conservative specific provisions made in relation to the bank’s corporate and Islamic financing portfolios,” Emirates NBD said. “Going forward the bank aims to keep improving the coverage ratios.”
During the nine-month period, the bank’s total assets were up 8 per cent at Dh 332.3 billion compared with Dh308.3 billion at the end of 2012. Customer loans at Dh234.4 billion was up 7 per cent relative to Dh 218.2 billion at the end of 2012. Customer deposits at Dh228.6 billion, up 7 per cent from Dh213.9 billion at the previous year-end.
“Profitability has been underpinned by a strong 13 per cent increase in revenue as growth momentum, particularly in our retail and Islamic franchises, has continued to gather pace,” said Pudner.
At the close of the third quarter, the bank’s loan-to-deposit ratio was at 102.5 per cent. “Loans to deposit ratio is within target range of 95 to 105 per cent. Capital adequacy ratio remains at a healthy level of 19 per cent while Tier 1 ratio strengthened to 14.9 per cent from 13.8 per cent at the end of 2012,” said Subramanian.
The bank said its debt maturity profile is comfortably within existing funding capabilities. “We have not fund raising target for this year. But any suitable market opportunity could be utilised,” Subramanian said during a conference call.
By Babu Das Augustine Deputy Business Editor
Gulf News 2013. All rights reserved.
