DUBAI, Oct 27 (Reuters) – Emirates NBD (ENBD.DU), Dubai’s biggest bank, reported a 51% rise in third-quarter net profit on Thursday on higher revenue, including net interest income and transactions.
Emirates NBD posted a net profit of 3.8 billion dirhams ($1.03 billion) in the quarter, compared to 2.5 billion dirhams in the third quarter of 2021.
EFG Hermes estimated net profit at 3.14 billion dirhams.
In its corporate and institutional banking division, net income rose 1% “due to lower valuation allowances and higher fee income, increased capital market activity which compensated for lower volumes in the debt capital market”.
Emirates NBD has won a top spot in all of Dubai’s state-run initial public offerings this year, raising its fees and reviving a long-dormant business.
Net interest income jumped 37% on “improved loan and deposit mix” due to higher interest “impacting margins” and “strong growth in new loans“, said ENBD.
Net interest margins reached 3.57% in the quarter, compared to 2.65% a year earlier and 3.09% in the second quarter.
The balance sheet total increased by 1% compared to the previous quarter to 721 billion dirhams. Its non-performing loan ratio fell to 5.8% from 6.1% in the previous quarter. Cash coverage fell to a ratio of 152.2% from 154.8% in the second quarter.
ENBD, the second largest lender in the United Arab Emirates behind First Abu Dhabi Bank, said its loss on the net monetary position of its Turkish subsidiary DenizBank was 2.4 billion dirhams in the first nine months of 2022.
Turkey and Egypt, where the ENBD also has a unit, “saw a strong increase in service inflows and tourism revenue, offsetting some of the impact of rising energy costs on the current account deficit,” the ENBD said.
“The outlook for the Middle East remains positive despite the weak global backdrop. Rising oil prices in 2022 pushed GCC budgets into surplus and strengthened sovereign balance sheets,” Emirates NBD said in a statement.
It revised its growth forecast for the United Arab Emirates up this year to 7% and for 2023 revised down to 3.9%.
Rates are rising at a faster pace than ENBD predicted, he said, as inflation remains at multi-decade highs in several countries.
($1 = 3.6727 UAE Dirham)
Reporting by Yousef Saba; Editing by Jacqueline Wong
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