Emirates NBD done with Dubai World provisions

Bank's 9-month profit plunges 39% to Dh1.93 billion

Emirates NBD, the largest bank in the Gulf, on Monday said its 9-month net profit plunged 39 per cent to Dh1.93 billion compared to Dh3.16 billion for the same period last year due to Dubai World provisions.

In a statement to Dubai bourse, the bank said total income fell to Dh7.5 billion for the 9 months ended 30 September 2010, down 10 per cent.

Net interest income for the period also dropped to Dh5.2 billion, down six per cent.

The bank’s operating expenses improved 14 per cent to Dh2.3 billion in the first 9 months of 2010.

Ahmed Humaid Al Tayer, Chairman of Emirates NBD, said: “In the light of the economic conditions and challenges that faced the banking sector globally and locally, Emirates NBD delivered a robust performance in the first 9 months of 2010, reflecting the strength and resilience of the Bank and its position as the region’s leading banking group.

"The UAE has witnessed early signs of stability and increased economic activity, confidence and credit appetite. Emirates NBD remains optimistic about the sustainability of the expected economic recovery both globally and regionally and we are confident about our ability to take advantage of value-adding opportunities for our shareholders.”

Emirates NBD, the Middle East's largest bank by assets, reported Dh424 million in third-quarter net profit compared with Dh1.05 billion in the same quarter one year ago, a drop of 60 per cent.

The bank’s non-performing loan ratio witnessed big increase, rising to 3.66 per cent in third quarter 2010 compared with 2.3 per cent at the end of 2009.

The bank added Dh708m in impairment in third quarter, taking total nine-month impairments portfolio to Dh2.6bn. The bank also made specific provisions for its exposure to Dubai World in full in third quarter 2010 without revealing the figures.

Customer deposits reached Dh198.8 billion, up 10 per cent from Dh181.2 billion at the previous year-end. Customer loans fell six per cent to Dh201.1 billion from Dh214.6 billion at the end of 2009.

Capital adequacy ratio further strengthened to 20.1 per cent compared with 18.7 per cent at the end of 2009
Earnings per share plunged to Dh0.31 for the 9 months ended 30 September 2010 against Dh0.56 in Q3 2009.

Rick Pudner, Chief Executive Officer, said: “During the first 9 months of 2010 we have continued to make significant progress toward the achievement of our strategic objectives. Due to our dedicated focus on liquidity and capital management, our funding profile has improved significantly while capitalisation levels have further strengthened to extremely comfortable levels.

"In addition, operating expenses have declined significantly from the previous year from ongoing rationalisation and our ability to leverage off the completion of the integration in 2009. Finally, we have continued to invest in selected platforms for growth such as our Private Banking business and Abu Dhabi expansion and are well positioned to capitalise on expected improvements in economic activity.”



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