Emirates NBD, Dubai’s largest bank, on Monday reported a 24 percent slide in first quarter net profits after making huge provisions for risks resulting from the impact of coronavirus.
The bank posted $567 million (2.1 billion dirhams) in net profit for the three months to March compared to $747 million in the same period in 2019, the bank said in a statement.
“Net profit declined 24 percent year on year due to higher impairment charges,” said Emirates NBD, the second-largest lender in the United Arab Emirates.
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The bank put aside $697 million for risks “in recognition of a potential deterioration in credit quality in subsequent quarters related to the coronavirus pandemic,” it said.
“During these uncertain times, we have aimed to ensure that we continue to provide customers with uninterrupted banking,” CEO Shayne Nelson said.
“Despite higher provisions in the first quarter of 2020, the Bank delivered a good set of results… whilst maintaining healthy capital, liquidity and credit quality ratios.”
The provisions made by the bank are 350 percent more than the corresponding quarter last year.
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The bank’s net interest and non-interest incomes increased in the first quarter by 45 percent and 48 percent respectively.
The assets of Emirates NBD, which last year acquired Turkish lender DenizBank, rose a modest one percent to $188.5 billion.
UAE’s central bank said on April 5 that it had doubled to $70 billion a stimulus package aimed at supporting the economy and domestic banks in the face of coronavirus.
Most of the measures focused on easing financial and liquidity requirements for banks to free up cash for lending.
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The regulator’s measures also allowed banks to defer clients’ repayments of loans until the end of 2020.
UAE has introduced strict measures to combat the disease including imposing a lockdown on Dubai, halting travel and closing shopping malls and entertainment venues.
AFP with additional input by GVS News Desk