Dubai's Emirates NBD posts better-than-expected 12% rise in Q1 profit

Emirates NBD EMIRATESNBD, Dubai's biggest bank by assets, reported on Thursday a 12% rise in first-quarter net profit, driven by regional growth, higher transaction volumes, a low-cost funding base and significant impaired loan recoveries.

Net profit for the first three months of the year came in at 6.7 billion dirhams ($1.82 billion), up from 6 billion dirhams in the same period of 2023, outperforming the average analyst estimate of 4.5 billion dirhams, according to LSEG data.

Emirates NBD's total assets rose to just over 900 billion dirhams at the end of the first quarter, up 15% year-on-year, while loans grew by 5% in the same period and deposits increased by 13%.

At the same time, credit quality improved.

"Non-performing, or bad, loans, ratio improved to 4.4% on continued strong recoveries, writebacks, write-offs and repayments in a healthy operating environment," the bank said.

The non-performing loan ratio was 5.6% at the end of March 2023.

Banks in the United Arab Emirates, where Emirates NBD is among the largest, have benefited from the Gulf region's growth prospects amid an uncertain global economic environment as regional governments boost investment into developing non-oil sectors and diversifying income sources.

The lender has expanded its regional presence in Saudi Arabia to take advantage of the opportunities in the Arab world's largest economy, doubling the number of branches there to 18 in the last year, and registering loan growth of 19% in the first quarter.

($1 = 3.6724 UAE dirham)