Dubai’s Emirates NBD Q4 profit drops 62 pct on provisions

Wed Feb 15, 2012 12:38am EST

* ENBD provisioning up 425 pct in Q4, 56 pct in 2011

* Net profit for 2011 up 6 pct to 2.48 bln dirhams

* Bank further revalues down Union Properties

(Adds detail, background)

By David French

DUBAI, Feb 15 (Reuters) – Emirates NBD,
Dubai’s largest bank, posted a 62-percent fall in its
fourth-quarter net profit on Wednesday, as provisions weighed
heavily for the second quarter in succession.

The bank had net profit of 152 million dirhams ($41.38
million) in the three months ending Dec. 31, compared with 403
million dirhams in the same period a year earlier.

Two analysts had forecast profit of 114 million dirhams and
230.30 million dirhams.

Impairment allowances jumped 425 percent in the quarter, at
1.06 billion dirhams in the three-month period, compared with
201 million dirhams this time last year.

Total impairments for 2011 stood at 4.98 billion dirhams, up
56 percent from 3.2 billion dirhams in 2010.

ENBD had warned in October — following a 59-percent drop in

third-quarter profits on provisioning against government-linked
debt exposure — that its final quarter numbers were likely to
be hit by further impairment charges.

Net profit for 2011 rose 6 percent to 2.48 billion dirhams
compared to 2.34 billion dirhams in 2010.

ENBD said the takeover of Dubai Bank did not impact the
bank’s net profit or non-performing loans ratio “as on the date
of acquisition.”

The bank merged with the sharia-compliant institution at the
behest of the government in October, after the authorities were
forced to rescue Dubai Bank earlier in 2011.

ENBD wrote down its investment in Union Properties by a
further 750 million dirhams, it said on Wednesday.

Union Properties, in which ENBD has a 47.6 percent stake,
sealed a 3.8 billion debt deal with the bank, its chief
executive told a local paper in January, with 1.1 billion of
assets transferred to the bank and 2.7 billion dirhams of debt
extended for five years.

The board of directors have recommended a 20-percent cash
dividend for 2011, the statement added.

($1 = 3.6730 UAE dirhams)

(Editing by Amran Abocar)

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