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Emirates NBD Q3 Net Profit Up 3pc

The bank, which is also the country’s largest by market capitalisation, posted net income of Dh1.05 billion for the third quarter, up slightly from the Dh1.02 billion that it earned in the same three months of last year. The latest quarterly results marked a 24 per cent rise from the Dh852 million that Emirates NBD earned in the second quarter of this year.

“We are expecting flat growth” for the full year, “matching results achieved last year,” Chief Executive Officer Rick Pudner told reporters on a conference call. “We do remain cautious.”

The company’s net profit for the first nine months of 2009 declined by 14 per cent to Dh3.2 billion from Dh3.7 billion a year ago, due to what it said in a statement were “prudent” credit impairment allowances.

“While the operating environment in the first nine months of the year has been challenging, we have delivered a robust financial performance,” Pudner said in the statement. “In line with our focus on balance sheet optimisation, we have taken steps to bolster our capital base during the first nine months of the year and have significantly improved our funding profile.”

However, credit impairments multiplied to Dh699 million in the third quarter from Dh91 million a year ago. Earnings per share for the nine months equalled Dh0.57, down from last year’s Dh0.66, the bank said.

“Uncertainties and challenges remain in the near term, and Emirates NBD retains its cautious stance while selectively pursuing growth opportunities and improving profitability and efficiency,” the bank said.

Pudner added: “Our remaining debt is very manageable without tapping the debt market. We’ve got Dh2.3 billion maturing this quarter and Dh7 billion due for repayment in 2010.”

Non-performing loans, or NPLs, are expected to peak by the middle of next year at about 2.5 per cent of all loans, the bank’s Chief Financial Officer Sanjay Uppal said in the conference call.

The bank’s NPL ratio stood at 1.88 per cent in the third quarter, up from 1.56 per cent in this year’s second quarter. Pudner said that the bank expects its NPL ratio to continue rising to 2 per cent by the end of 2009 and 2.5 per cent in 2010.

Net interest income reached Dh1.84 billion for the third quarter and Dh5.49 billion for the first nine months of 2009, an increase of 32 per cent and 33 per cent, respectively, from the corresponding periods of 2008. The bank attributed the increases to “controlled growth” in lending and an improvement to 2.55 per cent in the 2009 year-to-date net interest margin from 1.96 per cent a year ago.

Loans as of September 30, including Islamic financing, totalled Dh217.1 billion, up 3.9 per cent from the end of 2008. Customer deposits as of the end of September equalled Dh183.6 billion, an increase of 13.1 per cent over the deposit base at the end of December 2008.

The integration of Emirates Bank and National Bank of Dubai, which are merging, continues to progress. The merger is expected to become a legal fact during the current final quarter of 2009. At that point, the bank aims to start rolling out its new, unified brand from December onwards, Pudner said.

Uppal said that Emirates NBD would focus on developing its private banking business and expanding its branch presence in Abu Dhabi. The bank’s shares jumped by 4.5 per cent to close at Dh4.44 on the Dubai Financial Market.

· abdulbasit@khaleejtimes.com