Dubai: Leading Dubai-based banks such as Emirates NBD, Emirates Islamic and Commercial Bank of Dubai (CBD) reported their first quarter financial results last week with net profits exceeding market expectations.
Despite relatively slower economic growth than what was projected earlier, the bank results looks broadly resilient. In its latest economic outlook, the International Monetary Fund (IMF) has revised the UAE’s economic growth outlook downwards from the October 2018 forecasts, report agencies.According to the latest IMF estimates, the UAE economy grew by 1.7 per cent against the October forecast of 2.91 per cent in 2018. For 2019, the IMF’s World Economic Outlook has projected 2.8 per cent real GDP growth compared to the earlier forecast of 3.6 per cent.
Stronger earnings in the first quarter of this year indicates that the banks have been successful in controlling both operating costs and cost of risks while expanding balance sheets in a relatively tougher macro-economic environment.
Emirates NBD, Dubai’s top bank by assets reported a net profit of Dh2.7 billion up 15 per cent year-on-year and quarter-on-quarter. Total income for the quarter ended March 31, 2019 amounted to Dh4.71 billion; an increase of 5 per cent compared with Dh4.49 billion in the preceding quarter.
The bank’s solid operating performance was supported by an increase in total income, driven by loan growth and stable margins. Core fee income increased 15 per cent year on year on the back of higher income from forex and derivatives.