DUBAI  - Emirates NBD, Dubai's largest bank, reported a 15 percent rise in first-quarter net profit as loan growth and improved margins offset an increase in provisions and operating costs, beating analysts' expectations.

The bank said on Wednesday it made a net 2.7 billion dirhams ($735 million) in the three months ended March 31, compared with 2.39 billion in the year-ago period.

SICO Bahrain had projected a net profit of 2.54 billion dirhams, while EFG Hermes predicted 2.4 billion.

Emirates NBD earlier this month raised a total of 621 million pounds ($810 million) from the sale of its stake in Network International in a London flotation.

Emirates NBD also said it would buy Turkey's Denizbank from Russia's Sberbank at a roughly 20 percent discount to a previously agreed price, after a steep fall in the Turkish lira. 

"We are already positive on the bank," said Shabbir Malik, an analyst at EFG Hermes. "There are catalysts from the sale of Network International and the acquisition of (Turkey's)Denizbank."

Shares of Emirates NBD were down 0.8 percent after the earnings, are up nearly 34 percent year-to-date, outperforming a near 11 percent gain in the benchmark Dubai index.

Emirates NBD, which is 55.6 percent owned by state fund Investment Corp, and other banks in the United Arab Emirates benefited from a rise in interest rates in 2018.

The lender's net interest margin grew 15 basis points from the corresponding period to 2.83 percent.

Net interest income grew by 14 percent during the first quarter, while non-interest income rose 18 percent.

The bank said a 9 percent increase in costs was due to investments in its digital transformation.

Emirates NBD also said its group chief financial officer Surya Subramanian had resigned to pursue family matters at home in Singapore. 

($1 = 3.6726 UAE dirham)

($1 = 0.7665 pounds)

(Reporting by Alexander Cornwell and Saeed Azhar Editing by David Holmes) ((Saeed.azhar@thomsonreuters.com))