Dubai: Emirates NBD, the largest bank in UAE by total income and branch network on Wednesday reported a 51 per cent increase in the net profits to Dh3.9 billion for the first 9 months of 2014.

Total Income for the first nine months of 2014 grew by 25 per cent to Dh10.89 billion. Net interest income grew 19 per cent as the bank focused asset growth on higher margin retail and Islamic products.

For the third quarter of the year, the bank’s net profit was up 102 per cent to Dh1.56 billion compared to Dh775 million. On quarter on quarter basis, net profit surged 20 per cent compared to Dh1.3 billion in the second quarter.

“During the first nine months of 2014, we have delivered another healthy set of results. This is driven by strong growth in both net interest income and non-interest income. It is very pleasing that each part of the business was able to deliver year-on-year revenue growth,” said Shayne Nelson, Group Chief Executive Officer, Emirates NBD.

For the third quarter of the year, the bank’s net interest income grew 9 per cent year on year to Dh2.46 billion as non-interest income surged 55 per cent to Dh1.38 billion in the same period.

Non-interest income for the period improved by 39 per cent to Dh3.86 billion from the previous year, driven primarily by increases in trade finance and foreign exchange income, brokerage & asset management fees and gains from the sale of investments and property.

“ENBD’s results beat our estimates with a huge margin with the surprise emanating from lower provision expenses. The top-line was slightly higher than our estimate, while non-interest income was largely in line with expectations,” said Naveed Ahmed, Senior Manager, Research Group at Global Investment House.

For the first nine months of this year the net interest income for the period improved by 19 per cent to Dh7 billion from Dh5.91 billion during the comparable period in the previous year. The improvement in net interest income is attributed to an improved asset mix due to retail and Islamic growth, a lower cost of funds helped by CASA [current accounts and savings account] growth and the full repayment of relatively expensive Ministry of Finance Tier 2 deposits as well as a contribution from our Egyptian business.

“Despite a competitive environment we have been able to widen margins helped by growth in higher margin retail and Islamic products, a more efficient funding and capital base and contribution from our Egyptian business,” said Surya Subramanian, Group Chief Financial Officer of Emirates NBD.

Costs for nine months ended 30 September 2014 amounted to Dh3.21 billion, an increase of 8 per cent over the same period in the previous year. Excluding Egypt, costs were up 4 per cent year on year. The impaired loan ratio improved to end the period at 12.6 per cent as net impaired loans decreased by Dh1.4 billion due to a sharp rise in repayments and recoveries on the back of an improved economy. The impairment charge for first nine months of 2014 increased to Dh3.83 billion, compared with Dh3.4 billion in the previous year. Impairment allowances for the third quarter was down 20 per cent at Dh1.2 billion compared to Dh1.5 billion in the same quarter last year.

While the deposits increased by 4 per cent and regular customer loans increased by 2 per cent from the end of 2013. As at 30 September 2014, the bank’s total capital adequacy ratio and Tier 1 capital ratio were 20.4 per cent and 17.2 per cent respectively. The 1.9 per cent improvement in the Tier 1 ratio is due to retained profit coupled with a $500 million Tier 1 issue.