Dubai: The first half financial results of four banks announced yesterday broadly reflected stress on banking sector revenues, loan growth, profitability and asset quality.
Emirates NBD which reported a first half net profit of Dh3.71 billion, up 12 per cent year-on-year and a 16 per cent year-on-year increase in the second quarter profit to Dh1.91 billion was an exception to the trend in terms of profit growth and asset quality.
The bank’s total loans grew 6 per cent since end 2015 with good growth in corporate and Islamic financing. Provisions of Dh1.45 million improved 27 per cent year on year. NPL ratio improved to 6.6 per cent and coverage ratio strengthened to 118.5 per cent as at June 30, 2016.
Analysts said Emirates NBD’s second quarter earnings were above their expectations. “We find it a good set of numbers driven by strong growth and benign credit costs. With the Expo 2020 project awards, we expect ENBD to be one of the key beneficiaries in Dubai,” analysts at Dubai-based Arqaam Capital said in a note.
Abu Dhabi Commercial Bank’s (ADCB) first half 2016 net profits of Dh2.14 billion were lower by 15 per cent year-on-year reflecting higher funding costs and increase in impairment allowances.
The bank’s net interest income and income from Islamic financing was down by 3 per cent to Dh3.09 billion, while the non-interest income was up by 10 per cent to Dh1.15 billion, year-on-year. The bank reported a 6 per cent growth in loans and advances as customer deposits were up 4 per cent.
Emirates Islamic, the Islamic bank belonging to the Emirates NBD Group reported a net profit of Dh137 million for the first half of 2016 compared to Dh446.9 million reported in the same period last year. For the second quarter of 2016 the bank reported a net profit of Dh92 million down 63.6 per cent from Dh253.24 million in the same quarter last year.
United Arab Bank (UAB) which went through a massive balance sheet restructuring and deleveraging last year reported a net profit of Dh71 million for the first half of 2016, compared to a net loss of Dh511 million in the second half of last year.
