DUBAI  - Emirates NBD  (ENBD), Dubai's largest lender, posted a 16 percent rise in third-quarter net profit on Tuesday as net interest income jumped and impairments for bad loans eased.

The bank made a net profit of 2.64 billion dirhams ($718.8 million) in the three months to Sept. 30, a statement from the bank said, compared to 2.28 billion dirhams in the corresponding period of 2017. 

The results were broadly in line with the average forecast of three analysts polled by Reuters of a net profit of 2.57 billion dirhams.

The bank, 55.6 percent owned by state fund Investment Corp., is the latest United Arab Emirates-based bank to report positive profit growth during the quarter and follows First Abu Dhabi Bank and Dubai Islamic Bank also reporting double-digit profit rises.

Net interest income increased 18 percent from the same quarter of last year, while net interest margins also improved to 2.9 percent, which the bank attributed to rate rises feeding through to the loan portfolio. That helped overcome the impact of a 1 percent drop in non-interest income and a 15 percent rise in costs over the same period.

Reflecting an improved outlook for Dubai's economy, provisions for bad loans fell 18 percent to 353 million dirhams during the quarter.

The bank, which raised a $2 billion three-year loan late last month, said in August it was closely monitoring the situation in Turkey after a plunge in the lira since it acquired Turkey's Denizbank from Russia's state-owned Sberbank in a $3.2 billion deal announced in May.

Arqaam Capital has said it expects the acquisition price to be revised down sharply and for the deal to close in the fourth quarter.

Emirates NBD's loans and advances stood at 324.7 billion dirhams at the end of September, up 7 percent since the end of last year. Deposits increased 4 percent over the same period to 341.2 billion dirhams. ($1 = 3.6728 UAE dirham)

(Reporting By Tom Arnold; Editing by Muralikumar Anantharaman) ((Tom.Arnold@thomsonreuters.com; +97144536265; Reuters Messaging: tom.arnold.thomsonreuters.com@reuters.net))