(MENAFN - Khaleej Times)Emirates NBD, one of the leading banks in the region, on Thursday said its fourth-quarter net profit more than trebled on the back of lower impairments and increased non interest income.
The bank, beating analysts' forecasts, made a net profit of Dhs625 million in the three months to December 31 compared with Dh152 million in the same period last year as the lender reported a three per cent growth in annual net profit to Dh2.56 billion in 2012, compared to Dh2.5 billion in 2011.
The emirates NBD head office building in Dubai. The bank's total assets increased by eight per cent to Dh308.3 billion from Dh284.6 billion at the end of 2011. - Reuters
Emirates NBD, majority owned by the Investment Corporation of Dubai, is seeking to expand its regional footprint through acquisitions as it seeks new markets to drive growth. As part of the drive, the Dubai lender announced in December that it is buying BNP Paribas' Egyptian business for 500 million.
The bank's total assets increased by eight per cent to Dh308.3 billion from Dh284.6 billion at the end of 2011.
The lender also declared cash dividend of 25 per cent per share.
"Despite the challenges reflected in the broader global economic environment, the UAE and Dubai in particular have shown resilience and solid growth during the year and Emirates NBD is well-placed to continue to capitalise on this improving economic backdrop," Shaikh Ahmad bin Saeed Al Maktoum, Chairman of Emirates NBD said in a statement.
"These financial results reflect a very positive operational performance and demonstrate the strength of Emirates NBD and its position as a leading bank in the region."
Provisions for the final three months of 2012 period stood at Dh940 million, down from the Dh1.06 billion the bank recorded in the corresponding period of 2011.
This took impairment allowances for 2012 to Dh4 billion, below the Dh4.98 billion the bank set aside for bad loans in the previous year. The bank also booked a profit from associates of Dh37 million for the fourth quarter of 2012, versus a loss of Dh227 million in the same period of 2011.
Loans and advances gained three per cent in the fourth quarter, taking growth for 2012 to seven per cent. This exceeds the five-six per cent forecast given by chief executive Rick Pudner in October.
Pudner said the bank may not need to raise debts this year, when Dh4.4 billion worth of debt matures. "However, if we find attractive deals, then we might reconsider looking at raising debts," he said in a conference call.
"Overall, the outlook is positive and Emirates NBD is well placed to meet liquidity requirements this year."
Emirates NBD's chief financial officer, Surya Subramanian, said the bank has continued to deliver strong levels of operating profitability during 2012 with top-line growth supported by an improving underlying operating cost position and a gradually declining risk cost.
"The year has also seen a sustained focus on balance sheet optimisation resulting in strong growth in stable low-cost deposits and the issuance of almost Dh15 billion in medium term liabilities."
Deposits increased 11 per cent over the course of 2012. By comparison, figures from the UAE Central Bank said sector-wide deposits grew 8.7 per cent in the first ten months of the year.
Total income rose three per cent to Dh 10.212 billion. Total income for fourth quarter increased by one per cent to Dh2.506 billion.
Net interest income declined by five per cent to Dh6.912 billion. Fourth quarter net interest income dropped by eight per cent to Dh1.766 billion.
"The declining trends in net interest income were attributable to net interest margin compression in 2012 to 2.43 per cent from 2.69 per cent in the previous year resulting from lower loan spreads and the impact of increased wholesale debt funding," the bank said.