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Dubai’s ENBD Q2 net surges 87 pct as provisions drop
Q2 net profit 744 mln dirhams vs 398 mln dirhams yr-ago; Impairment allowances for Q2 drop 18 pct; Rise in non-interest income help drive profits in Q2
July 25, 2011 9:02 by p.deleon
Emirates NBD , Dubai’s largest bank by market value, on Monday said its second-quarter net profit surged 87 percent helped by a drop in loan loss provisions and improved income from investment securities.
The lender, which reshuffled its board last month, made a net profit of 744 million dirhams ($202.6 million)for the three month period ending June 30, compared with 398 million dirhams in the prior-year period.
Four analysts polled by Reuters had estimated an average profit of 746.3 million dirhams for the second quarter.
Profit for the first six months climbed 46.7 percent over the same period last year to 2.2 billion dirhams, ENBD said in a bourse statement.
Impairment provisions fell 18 percent to 981 million dirhams during the quarter, helping aid profit growth. Total provisions stood at 3.8 billion dirhams for the six-months ended on June 30.
Non-interest income climbed by 43 percent in the second-quarter due to improved income from investment securities, the company said, adding that trading business was impacted during the period due to political unrest in the region and debt concerns in the euro zone.
Loans fell 2 percent in the first half, signalling lending activity remains muted, while deposits were stable from December at 200.5 billion dirhams, the statement said.
In June, Emirates NBD reshuffled its board of directors, resulting in the appointment of Sheikh Ahmed bin Saeed al-Maktoum, one of Dubai’s most influential names, as chairman. The move could signal potential changes to come in Dubai’s banking sector, analysts said.
ENBD shares have risen 52 percent this year outperforming the benchmark which is down 6.7 percent year-to-date. (Reporting by Shaheen Pasha, Editing by Dinesh Nair)