Emirates NBD has reported a 30 per cent drop in profit for 2010, with profit falling to AED2.34bn ($637m) from AED3.34bn in 2009.

The declining profit followed a 10 per cent fall in total income, an 8 per cent drop in interest income, and a 13 per cent fall in non-interest income.

Loans fell by 8 per cent during 2010 to AED197.1bn at the end of the year, and deposits increased by 10 per cent to AED200bn. That has brought the banks total loans to below the level of deposits, a shift from 2009 when the bank ended the year with loans of AED214.6bn, but deposits of only AED181.2bn.

Emirates NBD projects a 5 per cent loan growth for 2011. “We will continue to increase our lending activities in identified pockets of growth particularly in small-to-medium sized enterprises (SMEs) and take opportunities when we think they are at the right pricing level,” says chief executive Rick Pudner.

“We will focus on driving profitability instead of enhancing profitability this year,” he adds.

The bank made provisions of AED3.2bn, down 4 per cent from 2009. Emirates NBD said this included full provisions for exposure to Dubai World.

“Although economic activity during 2010 remained relatively subdued, the year witnessed signs of stability and improving economic activity, confidence and credit appetite in the UAE,” the bank said a statement.

“The UAE financial sector is now showing signs of emerging from the deleveraging process, which commenced at the end of 2008,” it added.