Emirates NBD profit up in third quarter of 2009

Dubai: Emirates NBD, the UAE's biggest bank by assets, reported a three per cent increase in third-quarter profit beating analysts' forecasts.

The bank's net income rose to Dh1.05 billion in the third quarter this year from Dh 1.02 billion.

"The third quarter of 2009 has witnessed continued stabilisation of local and international economies and sentiment and confidence. However, we continue to move forward in a prudent manner," said Ahmad Humaid Al Tayer, chairman of Emirates NBD.

Environment

In the third quarter of 2009, total income grew by 39 per cent to Dh2.76 billion from Dh1.98 billion in the third quarter of 2008. Net interest income reached Dh5.48 billion in the first nine months of 2009 and Dh1.84 billion for the third quarter of 2009.

"While the operating environment in the first nine months of the year has been challenging, we have delivered a robust financial performance. Revenue growth in the period has been strong due to the broad-based strength of our businesses," said Rick Pudner, Emirates NBD's chief executive officer.

Buoyed by the results, the stock advanced 4.5 per cent to Dh4.44, the highest in more than a week.

Analysts polled by news agencies last week had forecast an average third-quarter net profit in the range of Dh580 to Dh650 million.

Emirates NBD's credit impairments jumped to Dh699 million during the third quarter of this year compared to Dh91 million for the same period last year.

"With quarterly revenue run-rate in 2009 of Dh2.8 billion and strong cost control the bank's core operations continue to be healthy.

"While the Dubai exposure is high, the growth in NPLs [non-performing loans] continues to be well provisioned for," said an analyst with Al Mal Capital.

Senior bank officials said yesterday that they have made adequate provisions for NPLs including those arising out of potential bad loans to Saad and Algosaibi groups of Saudi Arabia.

"We have followed the central bank guidelines in making adequate provisions and we have been very conservative in our provioning policy," said Sanjay Uppal, Chief Financial Officer of Emirates NBD.

Merger process

Emirates NBD is expected to complete the full integration of the two merged entities Emirates Bank International and National Bank of Dubai by the year end, the bank's Chief Executive Rick Pudner said on Monday.

An important part in the integration process is the completion of the legal merger, which is expected to take place during the final quarter of 2009. The bank is aiming to roll out its new brand starting December.