Tuesday 14 / May / 2024
Dubai: Emirates NBD reported third-quarter profit that missed analysts’ estimates as the United Arab Emirates’ biggest bank was hurt by bad loan provisions at its Islamic unit.
Net income was Dh1.66 billion ($453 million), little changed from Dh1.67 billion in the year earlier period, the Dubai government-controlled lender said in a statement to the city’s bourse on Monday.
The mean estimate of five analysts was for a profit of Dh1.83 billion. While overall impairments fell 11 per cent, they almost doubled at its Islamic unit to Dh455 million, the bank said in a separate statement.
“Whilst we have seen increased delinquencies in the micro small and medium enterprise segment, which has prompted Emirates Islamic to take additional provisions, the group’s overall credit quality continues to improve," Group chief executive officer Shayne Nelson said in the statement.
Oil’s plunge is curbing spending in the UAE, while the second biggest Arab economy is expanding at its slowest pace since 2010, leading to loan defaults. Banks in the UAE are prepared for deteriorating conditions as oil prices remain lower for longer and asset quality worsens, S&P Global Ratings said earlier this year.
Emirates Islamic Bank, the lender’s Islamic unit, reported a third-quarter loss of Dh31 million compared to an Dh87 million profit a year ago. The lender said earlier this month it plans to raise Dh1.5 billion from a rights issue to boost capital amid a surge in lending. Emirates NBD’s shares rose 0.8 per cent to Dh8.1 in Dubai trading.
Loans climbed 11 per cent at the end of September from a year earlier to Dh289.2 billion, while deposits rose by 16 per cent to Dh311.6 billion. The ratio of bad loans to total loans fell to 6.4 per cent from 7.1 per cent a year earlier, the bank said, while the net interest margin declined to 2.54 per cent in the nine months through September from 2.8 per cent in the same period a year ago.
