DUBAI - Emirates NBD, Dubai's biggest lender, on Tuesday posted a 12% rise in first-quarter net profit, citing improving economic conditions from the COVID-19 pandemic fallout and a sharp drop in impairments.
The International Monetary Fund expects most Gulf economies to recover this year at a faster pace than previously estimated, as it raised its 2021 global growth forecast earlier this month.
The bank reported a net profit of 2.32 billion dirhams ($599 million) in the reported quarter ended March 31, versus 2.081 billion dirhams in the year-ago period, Emirates NBD said in a statement, adding that net profit surged 76% on-quarter.
Broker EFG Hermes had projected a net profit of 1.795 billion dirhams for the quarter.
Hesham Abdulla al-Qassim, the bank's vice-chairman, said in a statement that the strong result "reflects the resilience and gradual economic recovery following the global disruption in 2020."
The Dubai lender said impairments dropped 31% in the first quarter from a year earlier, citing proactive provisioning in previous quarters.
Non-funded income was up 6% from a year earlier on improved fee and investment securities income.
The bank said expansion into Turkey, where it acquired DenizBank in 2019, has helped diversify its earnings, with DenizBank contributing 642 million dirhams or 28% of the group's net profit.
"The global economy is showing signs of recovery as vaccination programmes against COVID-19 are rolled out," it said in a statement.
The UAE, the Gulf's second-largest economy, will see growth of 3.1% this year, rebounding from a 5.9% contraction in 2020, the IMF said.
Emirates NBD said it expanded its network in the Saudi Arabia in the first quarter with new branches in the holy cities of Mecca and Medina.
($1 = 3.6728 UAE dirham)
(Reporting by Saeed Azhar; Editing by Himani Sarkar and Sherry Jacob-Phillips) ((Saeed.Azhar@thomsonreuters.com; +971 44536787; Reuters Messaging: email@example.com))