Emirates NBD tops in provisions

UAE national banks boosted loan loss provisions by nearly Dh500 million to Dh14.6 billion in 2011 and Dubai-based Emirates NBD (ENBD) accounted for more than a third of the total, a study showed on Sunday.

ENBD’s provisions against non-performing loans stood at around Dh4.97 billion in 2011 compared with nearly Dh3.5 billion in 2010, showed the study, published in the Sharjah-based Arab language daily Alkhaleej.

The government-controlled Abu Dhabi Commercial Bank (ADCB) cut provisions to Dh2.39 billion last year from Dh3.2 billion in 2010, the study showed.

Abu Dhabi-based First Gulf Bank came third in provisions, which stood at Dh1.55 billion in 2011 against Dh1.63 billion in 2010.

National Bank of Abu Dhabi, the UAE’s second largest bank after ENBD, boosted provisions to Dh1.49 billion from Dh1.2 billion while Mashreq Bank cut provisions to Dh1.19 billion from Dh1.76 billion.

The study showed the combined provisions by the 16 listed national banks accounted for nearly 42 per cent of their total income of nearly Dh34.6 billion.

“This means their net profits stood at about Dh20 billion in 2011…experts believe these provisions will bolster banks and guard them against fresh financial problems and debt defaults in the future,” it said.

“They said such provisions would allow banks to make higher profits in case they managed to collect some of the bad loans.”

The UAE, the second largest Arab economy, has a total 23 national banks and 28 foreign units, which control the largest assets base in the region.

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