Emirates NBD Q1 net up 25%

Emirates NBD bank beat analyst forecasts on Thursday with a 25 per cent jump in first-quarter net profit as higher interest and fee income outstripped a jump in provisions.

The lender, 55.6-per cent owned by state fund Investment Corp of Dubai, made a net profit of Dh1.04 billion ($283.7 million) in the three months to March 31, a bourse filing said, compared to Dh837 million in the same period last year.

An average of six analysts polled by Reuters forecast a net profit of Dh904.1 million for the first quarter.

The bank cited healthy growth in both net interest income and non-interest income, which climbed 28 per cent and 25 per cent respectively, for the rise in profits.

ENBD’s first-quarter profit would have been even greater if it were not for the 43 per cent year-on-year jump in provisioning.

The bank set aside Dh1.27 billion in the three months to March 31 to cover bad loans, which it attributed to continued conservative provisioning to increase its coverage ratio – which rose to 60.7 per cent from 51.4 per cent in the year-ago period.

Provisions, which have been a major drag on the bank’s profitability in recent years, have continued to remain high despite the improving local economy, with earnings in the final quarter of 2013 trimmed by a 40 per cent leap in impairments.

Loans and advances stood at Dh239.7 billion at the end of March, up 9 per cent on the same point last year. Chief Financial Officer Surya Subramanian said in January the bank was expecting loan growth of 7-8 per cent in 2014.

Meanwhile, deposits increased 13 per cent over the same timeframe, standing at Dh251.5 billion on March 31.

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