Emirates NBD's First-Quarter Profits Rise 3%

(Provisions AED 826 Million)

Emirates NBD's First-Quarter Profits Rise 3%

Emirates NBD, Dubai's largest bank by assets, announced that its first-quarter profits rose 3% compared to the same period last year. This marks the first set of results released by the UAE-based bank since the outbreak of the Iran-Iraq War nearly two months ago.

The bank said in a statement that first-quarter profits reached AED 6.4 billion ($1.74 billion), up from AED 6.2 billion in the same period last year. The profits exceeded expectations of AED 5.66 billion.

Total interest income grew by 3% to AED 17.28 billion, while provisions reached AED 826 million, compared to a reversal of provisions of approximately AED 465 million in the same quarter last year.

Emirates NBD's Chief Financial Officer, Patrick Sullivan, said in a statement, "The balance sheet saw strong growth, supported by continued deposit growth momentum throughout the quarter, which has risen 6% year-to-date, and this growth is expected to continue in April."

The bank said its total assets rose to AED 1.22 trillion at the end of March, with total loans increasing 7% and deposits 6% compared to the previous quarter.

"As the UAE's leading retail bank with a Dubai focus, Emirates NBD is among the most vulnerable to a slowdown in growth prospects," analysts at JPMorgan said in a note this week, according to Reuters.

JP Morgan noted that strong deposit inflows, including current and savings accounts that the bank has benefited from in recent years, may slow, but pointed out that balance sheet indicators remain strong even with the potential for higher risk costs.

The bank said today that it recorded an additional provision for expected credit losses in the UAE of AED 865 million during the first quarter, driven by provisions made at the bank and its Turkish subsidiary, Denizbank, which were partially offset by significant collections earlier this year.