Dubai lender Emirates NBD’s fourth quarter profit drops on higher cost of funding and devaluation of Egyptian pound

Emirates NBD profits fell sharply in the fourth quarter on higher funding costs and the impact of the devaluation of the Egyptian pound.

Dubai’s largest bank said on Monday its net profit fell to Dh1.85 billion for the three months to the end of December, a decline of 12.8 per cent compared with the same period a year earlier.

The bank blamed the decline on the higher cost of fixed deposits and wholesale funding impacting net interest income, with core fee income hit by the devaluation of the Egyptian pound in November.

However, the results came in ahead of forecasts by analysts, who had anticipated a more severe impact on the bank’s bottom line.

Impairment allowances for the quarter dropped to Dh424 million at the end of December, compared with Dh599m at the end of 2015, with the non performing loan ratio dropping to 6.4 per cent from 7.1 per cent over the same period.

Emirates NBD annual profits rose 2.1 per cent to Dh7.24bn for 2016, beating an average forecast of Dh6.8bn from eight analysts collected by Bloomberg.

The bank’s board recommended a 40 fils per share dividend for 2016. Emirates NBD also announced it had been granted licences to open three additional branches in Saudi Arabia, as well as its first branch in India.

jeverington@thenational.ae

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