Dubai: Leading Dubai-based banks such as Emirates NBD, Emirates Islamic and Commercial Bank of Dubai (CBD) reported their first quarter financial results last week with net profits exceeding market expectations.
Despite relatively slower economic growth than what was projected earlier, the bank results looks broadly resilient. In its latest economic outlook, the International Monetary Fund (IMF) has revised the UAE’s economic growth outlook downwards from the October 2018 forecasts.
According to the latest IMF estimates, the UAE economy grew by 1.7 per cent against the October forecast of 2.91 per cent in 2018. For 2019, the IMF’s World Economic Outlook has projected 2.8 per cent real GDP growth compared to the earlier forecast of 3.6 per cent.
Emirates NBD delivered a strong set of results in the first quarter, underpinned by higher income on the back of loan growth.
Stronger earnings in the first quarter of this year indicates that the banks have been successful in controlling both operating costs and cost of risks while expanding balance sheets in a relatively tougher macro-economic environment.
Emirates NBD, Dubai’s top bank by assets reported a net profit of Dh2.7 billion up 15 per cent year-on-year and quarter-on-quarter. Total income for the quarter ended March 31, 2019 amounted to Dh4.71 billion; an increase of 5 per cent compared with Dh4.49 billion in the preceding quarter.
The bank’s solid operating performance was supported by an increase in total income, driven by loan growth and stable margins. Core fee income increased 15 per cent year on year on the back of higher income from forex and derivatives.
We have recorded our highest ever quarterly net profit since our inception in 2004. Our operating performance is a result of core business growth.
“Emirates NBD delivered a strong set of results in the first quarter, underpinned by higher income on the back of loan growth, stable margins and increased foreign exchange and derivative income,” said Shayne Nelson, Group Chief Executive Officer of Emirates NBD.
Emirates Islamic, an Islamic financial institution belonging to Emirates NBD Group, also reported a net profit of Dh411 million for the first quarter of 2019, an increase of 97 per cent year-on-year and 54 per cent quarter-on-quarter.
“We have recorded our highest ever quarterly net profit since our inception in 2004. Our operating performance is a result of core business growth, linked with a continuing improvement in cost of risk,” said Salah Mohammed Amin, Chief Executive Officer of Emirates Islamic.
CBD posted a strong set of results for the first quarter of 2019 as net profit increased by 21.6 per cent underpinned by higher income and lower cost.
Commercial Bank of Dubai (CBD), another leading Dubai-based bank, reported a net profit of Dh340 million for the first quarter of 2019. Operating income for the first quarter of 2019 amounted to Dh774 million, an increase of 17.6 per cent attributable to a 7.7 per cent increase in net interest income (NII) and a 40.4 per cent increase in other operating income.
“CBD posted a strong set of results for the first quarter of 2019 as net profit increased by 21.6 per cent underpinned by higher income and lower cost,” said Dr Bernd van Linder, Chief Executive Officer of CBD.
