Emirates NBD profit soars 45%

Dubai: Emirates NBD, the Middle East's largest banking group by assets, on Tuesday reported a 45 per cent increase in net profit to Dh1.47 billion for the second quarter of this year.

For the first half of the year, the bank reported Dh2.68 billion profit, up 41 per cent compared to the combined first-half profits of Emirates Bank International (EBI) and National Bank of Dubai (NBD). Emirates NBD was formed last October after the Dubai Government merged EBI and NBD.

The total income of the bank reached Dh2.495 billion, an increase of 48 per cent compared to the second quarter of last year, while total assets reached Dh286 billion - an increase of 12.4 per cent from year end 2007.

"Our second-quarter performance demonstrates the value that the merger is delivering to our shareholders, customers and staff as we realise the vision of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of UAE and Ruler of Dubai, to create a regional banking champion," Ahmad Humaid Al Tayer, chairman of Emirates NBD, said in a statement.

Operating costs for Emirates NBD reached Dh931 million in the second quarter of 2008, a year-on-year increase of 45 per cent. "The increase in costs was driven by investments infrastructure platform, additional expenditure on staffing and governance and increasing distribution network," said Rick Pudner, CEO of Emirates NBD.

The cost-income ratio declined to 37.4 per cent in the first half of 2008 compared to 38.8 per cent in second half of 2007. This was the result of continued focus on costs management, productivity enhancement and realisation of synergies from the merger. Return on average shareholder equity was 27.6 per cent.