The largest bank of Dubai, Emirates NBD, on Wednesday, reported an 80 percent increase in 2nd quarter net profit assisted by the sale of a stake in Network International & strong non-interest income on foreign exchange gains.
There was a gain of Dhs2.1 billion which is equivalent to $572million included in the result from the sale of a stake in digital payment provider Network International in an early public offering in London in April.
The earnings reflected that top banks in the UAE have still withstood strains from an inactive economy & a property downturn in Dubai.
2nd quarter net profit climbed 80 percent to Dhs4.74 billion, the bank stated in a statement. EFG Hermes had anticipated a net profit of Dhs4.06 billion in the 2nd quarter.
The biggest lender of Dubai stated net interest income increased 6 percent in the 2nd quarter from the previous year, as growth in assets balances a fall in net interest rate margins.
Non-interest income increased 23 percent, due to gains in foreign exchange income & investment banking activities.
Provisioning for bad debt, yet, increased more than double to Dhs656 million in the 2nd quarter year-on-year. It did not provide any details of the provisioning.
Moody’s which is a credit-rating agency had warned at the beginning of this year provisioning charges for top banks in the United Arab Emirates will surge in 2019 owing to pressure in the property & the retail segment.
The rating agency stated that competitive pressures will limit loan book re-pricing, and the funding costs of United Arab Emirates’ top banks will surge as depositors take benefit of higher interest rates.
The Dubai lender stated that its net profit rose 49 percent in the first six months of the year.