Emirates NBD Bank posts flat Q3 y/y net profit
- 17 Oct 2024
Emirates NBD, Dubai’s biggest bank by assets, reported on Thursday flat third-quarter net profit, as an increase in net interest income was offset by higher impairment charges and investments to drive future growth.
Net profit for the July-to-September period was 5.2 billion dirhams ($1.42 billion), unchanged from the corresponding 2023 period, missing a mean analyst estimate of 6 billion dirhams, LSEG data showed.
The bank, majority-owned by the government of Dubai, reported a rise of 8% in net interest income to 8.5 billion dirhams, while non-funded income fell 15% to 3 billion dirhams.
Most Gulf central banks cut their key interest rates last month after the Federal Reserve decreased U.S. rates by half a percentage point, as most regional currencies are pegged to the U.S. dollar.
The Dubai lender earlier this year said it is focusing on growing its non-funded income amid expectations of interest rate cuts this year.
Total assets in the third quarter rose 14% on the year to 931 billion dirhams, while gross loans were up 6% at 508 billion and deposits were 13% higher, at 624 billion.
On a nine-month basis, the bank’s ratio of non-performing loans improved to 3.9% from last year’s 4.6%, boosted by “strong recoveries, writebacks, write-offs and repayments”, it added.
Banks in the United Arab Emirates have, in recent years, benefited from higher interest rates and also profited from the Gulf region’s growth plans as governments boost investment to diversify away from oil and tap different income sources.
In Dubai, which has become one of the world’s fastest-growing cities and the Gulf region’s economic hub, the property market has boomed amid a swift post-pandemic economic rebound, helped by relaxed residency rules.
Shares of the Dubai bank have risen 17.3% so far this year, outperforming its peers in the Gulf.