Emirates NBD reports 85 per cent profit rise

25 July 2011

Loan volumes decline as deposit growth is flat

Dubai’s Emirates NBD, one of the largest banks in the region by asset size, has announced an 85 per cent increase in profits, to AED744bn ($202m) in the second quarter of 2011, compared to the same period of last year.

The bank also announced a decline in total loans of 2 per cent, to AED197.1bn, while customer deposits were flat at AED2bn. However, because it has been shrinking the loan book, the loan-to-deposit ratio improved to 96 per cent, from 99 per cent at the end of 2010.

The improvement in profit was driven by a 43 per cent increase in non-interest income and a 18 per cent fall in impairment allowances, while net interest income was flat.

The bank said that conditions in Dubai were improving, and it was positioned to capitalise on that. “While regional geopolitical unrest impacted local markets during the first quarter as global investors reduced risk exposure across the region, conditions have improved considerably during the second quarter and have highlighted the UAE and Dubai as relative ‘safe havens’,” the bank said in a statement.

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