Business | Banking
Emirates NBD net profit up 13%
Emirates NBD, the Middle East's largest banking group by assets on Wednesday reported a 13 per cent increase in net profit to Dh1.01 billion in the third quarter of 2008.
- By Babu Das Augustine, Banking Editor
- Published: 23:56 October 22, 2008
Dubai: Emirates NBD, the Middle East's largest banking group by assets on Wednesday reported a 13 per cent increase in net profit to Dh1.01 billion in the third quarter of 2008.
The bank said yesterday that its third quarter results were hurt by a Dh273 million worth of write-downs in investment securities due to the global fall in asset prices.
"As the nation's banking champion, we are proud to be leading a strong banking sector through globally turbulent times," said Ahmad Humaid Al Tayer, Chairman of Emirates NBD.
In the third quarter, the total income increased 18 per cent to reach Dh1.98 billion, earnings per share was up 13 per cent year on year to Dh0.20.
"We are positive about the overall performance of the bank for 2008 and the year ahead. The write-downs reflect a reduction in asset prices globally and not an underlying credit issue," said Rick Pudner, chief executive officer (CEO) of Emirates NBD, during a conference call.
For the first nine months of the year, the bank reported an increase of 33 per cent in net profits year-on-year to Dh3.6 billion. The total income of the bank for the period increased 38 per cent to Dh6.66 billion and the earnings per share gained 33 per cent to Dh0.73.
"The bank's third quarter results confirm a continuing growth momentum across the core businesses. This underlines the strength and depth of the bank and highlights our ability to perform despite the challenging conditions," said Pudner.
For the first nine months of the year, the bank's total assets increased 12 per cent to Dh285.3 billion from Dh253.8 billion as at end of 2007. Customer loans grew 21 per cent to Dh202.2 billion as customer deposits increased by Dh165.9 billion, up 20 per cent from Dh138.6 billion as at end of 2007.
The provision charge for the first nine months of 2008 grew by 82 per cent to Dh810 million compared to the same period of 2007, while the charge for the third quarter increased by 30 per cent to Dh298 million.
"Credit quality remains very good across our corporate and retail portfolios and we remain comfortable with our loans and receivables book," said Sanjay Uppal, Chief Financial Officer of Emirates NBD.
"In relation to the mark to market writedowns noted previously, these are a reflection of the recent turmoil in financial markets rather than underlying credit concerns and the bank remains confident that the underlying credit quality," he said.
The bank's underlying exposure to subprime and related exposures is negligible and has been fully written down.
Pudner said liquidity in the UAE's banking sector was likely to remain tight in the fourth quarter.
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