Emirates NBD says reduced impairments helped lift profit in first half of the year

Emirates NBD reported a 12 per cent increase in profits for the first half of the year, as lower levels of bad debt allowed the bank to reduce impairment charges.

The UAE’s largest lender announced net profits of Dh3.7 billion for the six months to the end of June, compared with Dh3.3 bn in the same period last year.

The bank made a net profit of Dh1.91bn in the three months to June 30, according to a statement. That compared to Dh1.65bn in the corresponding period of 2015.

Four analysts on average had forecast the bank would make a net profit of Dh1.8bn dirhams for the quarter.

Emirates NBD’s impaired loan ratio, reflecting the level of bad debt on its books, fell to 6.6 per cent at the end of June from 7.4 per cent a year earlier.

This in turn enabled the bank to reduce allowances for impaired debt to Dh1.456bn, down from Dh1.986bn in June 2015.

The bank’s loan book grew 12 per cent to Dh286 million at the end of the first half of the year, while deposits grew 8 per cent to Dh297.6m during the same period.

Group chief executive Shayne Nelson said the bank remains ‘cautiously optimistic for the remainder of 2016,” having raised Dh14bn last month to boost structural liquidity.

The bank said that it expects tighter liquidity conditions in the UAE and a strong dollar to “continue to pose headwinds to non-oil growth, particularly in the services sectors,” but that rising oil output in line with official targets would help to boost the country’s GDP growth.

Emirates NBD shares opened unchanged at Dh8.50 each during early trading on the Dubai stock exchange.


* With Reuters


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