By Tom Arnold
DUBAI, April 22 (Reuters) – Emirates NBD (ENBD), Dubai’s largest lender, posted a 60 percent rise in first-quarter net profit on Wednesday, beating analysts’ forecasts as income from lending, fees and other products increased and provisions dropped.
The earnings growth is the steepest among the five banks that have reported so far in the United Arab Emirates.
The lender, 55.6-percent owned by state fund Investment Corp of Dubai, made a net profit of 1.67 billion dirhams ($454.67 million) in the three months to March 31, the bank said. This is up from 1.04 billion dirhams in the same period of 2014.
That was ahead of the average estimate of four analysts polled by Reuters for a fourth-quarter net profit of 1.46 billion dirhams.
ENBD’s performance has been lifted in recent quarters by strength in Dubai’s economy, where diversification has helped insulate banks from sluggish oil markets.
Net interest income reached 2.49 billion, up by 11 percent from the same period of last year. It cited an improvement in the performance of Islamic and retail assets and lower cost of funds for the climb.
The bank has been helped by an easing of debt woes. Emirates NBD’s fourth-quarter profit surged 82 percent helped by its reclassification of its Dubai World debt as performing.
Impairment allowances reached 1.1 billion dirhams at the end of the quarter, an improvement of 14 percent from the same period of last year. A drop in impairment charges helped lift the bank’s coverage ratio for bad loans to 103.9 percent at March-end, from 100.3 percent in the earlier quarter. (Reporting by Tom Arnold; editing by Matt Smith and Louise Heavens)