Emirates NBD PJSC’s first-half profit jumped 49 percent as Dubai’s biggest bank benefitted from the sale of a stake in its card payments processing unit.
Net income advanced to AED7.48 billion ($2.04 billion) from 5.02 billion a year earlier, the state-controlled lender said in a statement. The bank made AED2.1 billion from the initial public offering of Network International Holdings Plc in London. Without that, profit rose 8 percent.
The earnings “surprised positively” because of the higher-than-expected gain from the Ne- twork International sale, Shabbir Malik, an analyst at EFG-Hermes Holding SAE, wrote in a note. EFG-Hermes had expected Emirates NBD to make AED1.4 billion from the IPO.
The shares rose as much as 1.8 percent in Dubai before closing unchanged at AED11.30. They have climbed 27 percent this year compared with a 7.4 percent gain in the benchmark index. The rise in core operating profit was “helped by loan growth, higher foreign exchange income and increased investment banking activity,” Group Chief Executive Officer Shayne Nelson said in the statement.
Provisioning costs were higher than expected, but it’s not surprising as the bank is likely to have used the cushion from the gain on Network International to build coverage for bad loans, EFG’s Malik said.
Lender to open 20 more branches in Saudi Arabia
Emirates NBD said it received approval to open 20 more branches in Saudi Arabia as Dubai’s biggest bank expands in the Arab world’s largest economy.
The lender currently operates two branches in Riyadh, one in Jeddah and another in Khobar in the east. The expansion comes as Saudi Arabia opens up its economy to foreigners as part of a plan to diversify away from oil. The country’s cabinet last year gave approval to First Abu Dhabi Bank PJSC to open three branches in the kingdom.
Emirates NBD said it opened additional bran-ches in Egypt.