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UPDATE 1-Dubai's Emirates NBD Q1 profit rises 4 pct, meets forecasts
April 19, 2017 / 6:30 AM / 7 months ago

UPDATE 1-Dubai's Emirates NBD Q1 profit rises 4 pct, meets forecasts

(Adds details, context, analysts’ forecasts)

DUBAI, April 19 (Reuters) - Emirates NBD, Dubai’s largest lender, reported a 4 percent rise in first-quarter net profit on Wednesday as expenses and provisions for bad loans declined.

Net profit came in at 1.87 billion dirhams ($509 million) in the three months ended March 31, Emirates NBD (ENBD) said in a statement, compared with 1.81 billion dirhams in the year-ago period.

That was in line with the average forecast of three analysts polled by Reuters, who had expected a net profit of 1.79 billion dirhams.

State fund Investment Corp of Dubai holds a stake of 55.6 percent in ENBD, which is considered as a barometer for Dubai’s economy.

The lender’s general and administrative expenses dropped by 11 percent to 1.12 billion dirhams. It attributed the drop - the fifth straight quarterly fall - to a decline in staff costs as a result of cost-control measures introduced last year.

The bank and its subsidiaries last year adjusted to slower growth in the local economy. Emirates Islamic laid off around 300 people last year and ENBD made around 100 people redundant from another subsidiary.

The bank’s results were also boosted by a 23 percent drop in impairment charges to 639 million dirhams, compared with 829 million dirhams in the year-ago period as the net cost of risk improved, it said. The decline in costs helped offset a 3 percent drop in net interest income to 2.49 billion dirhams, from 2.56 billion dirhams a year ago. Non-interest income eased to 1.31 billion dirhams, down 16 percent from 1.35 billion dirhams a year ago.

In its outlook for 2017, the bank said it expected economic growth in the United Arab Emirates to rise by 3.4 percent this year, with higher oil prices helping to boost consumer and business sentiment, and higher government spending. The bank had expected economic growth to reach 3 percent in 2016.

$1 = 3.6730 UAE dirham Reporting by Tom Arnold and Hadeel Al Sayegh; Editing by Sherry Jacob-Phillips

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