Emirates NBD profit up 6pc for 2011
Dubai, February 15, 2012
Emirates NBD, Dubai's largest bank, posted a 6 per cent increase in the net profit for 2011 to 2.48 billion dirhams, compared to 2.34 billion dirhams in 2010.
However, the bank's fourth-quarter net profit fell 62 per cent fall, as provisions weighed heavily for the second quarter in succession.
The bank had net profit of 152 million dirhams ($41.38 million) in the three months ending December 31, compared with 403 million dirhams in the same period a year earlier.
Two analysts had forecast profit of 114 million dirhams and 230.30 million dirhams.
Impairment allowances jumped 425 percent in the quarter, at 1.06 billion dirhams in the three-month period, compared with 201 million dirhams this time last year.
Total impairments for 2011 stood at 4.98 billion dirhams, up 56 percent from 3.2 billion dirhams in 2010.
ENBD had warned in October -- following a 59-percent drop in third-quarter profits on provisioning against government-linked debt exposure -- that its final quarter numbers were likely to be hit by further impairment charges.
ENBD said the takeover of Dubai Bank did not impact the bank's net profit or non-performing loans ratio 'as on the date of acquisition.'
The bank merged with the sharia-compliant institution at the behest of the government in October, after the authorities were forced to rescue Dubai Bank earlier in 2011.
ENBD wrote down its investment in Union Properties by a further 750 million dirhams, it said on Wednesday.
Union Properties, in which ENBD has a 47.6 percent stake, sealed a 3.8 billion debt deal with the bank, its chief executive told a local paper in January, with 1.1 billion of assets transferred to the bank and 2.7 billion dirhams of debt extended for five years.
The board of directors have recommended a 20-percent cash dividend for 2011, the statement added.
Other highlights of the results announced on Wednesday included:
* Earnings per share for the year up 9 per cent to Dh0.41
* Net interest income for 2011 up 7 per cent versus 2010
* Core fee income grew 7pc compared with the prior year
* Customer loans stood at Dh203.1 billion, up 4pc compared with the end of 2010
* Customer deposits were Dh193.3 billion compared with Dh200.0 billion at the previous year-end
* Capital adequacy ratio further strengthened to 20.5pc
Sheikh Ahmed bin Saeed Al Maktoum, chairman of Emirates NBD, said: “These financial results reflect a positive and strong operational performance and demonstrate the strength and resilience of Emirates NBD. We have taken a more conservative approach to strengthen the bank’s position to meet the challenges reflected in the broader global financial markets and Emirates NBD is on course to realise its vision to be the leading and one of the largest and most successful banks in the region.'
Chief executive officer Rick Pudner said: “During 2011 we have delivered a robust set of financial results with net profits for the year up 6 per cent, despite an extremely challenging and volatile external environment and after adopting a significantly more conservative approach to de-risking the balance sheet. While the economic backdrop remains challenging, our successful execution towards our strategic imperatives and strong levels of capitalisation and liquidity position the Bank strongly to take advantage of selected growth opportunities in the future.”
Chief financial officer Surya Subramanian said: “The bank has continued to deliver strong levels of operating profitability during 2011 and has demonstrated both resilience and flexibility in the face of rapidly changing market dynamics. This has importantly resulted in a return to top line revenue growth across both interest and core fee income categories.” - Reuters and TradeArabia News Service