Shares in Emirates NBD, Dubai's largest lender, jumped yesterday in the last minutes of the trading session to gain 6.95 per cent.
The bank is emerging from the worst of its problems with exposure to Dubai World, and increased profitsshould follow, analysts say.
The rise came at the end of a day in which the Dubai Financial Market General Index slid 1 per cent, and followed an announcement that the bank would form a partnership with Acordias, a service platform for financial intermediaries, to market the bank's Middle East-focused funds in Europe.
An increased emphasis on asset management is one method lenders might use to shield their profits after recent Central Bank regulations on their loan fees and limits on retail lending. Emirates NBD has recently launched a hiring drive for its retail business.
Murad Ansari, an analyst at EFG-Hermes, said that despite sluggish growth in the UAE, the bank was coming to grips with its problems with bad debts and its core lending business should improve.
"We're nearing the point where non-performing loans ought to peak," Mr Ansari said. He added that growth would remain subdued as a major surge in Dubai's economy was not yet expected.
"However, having said that, the way banks have been dropping provisioning costs can lead to a very strong rebound in profitability," Mr Ansari said.
A recent note from Goldman Sachs said Emirates NBD's non-performing loans, excluding Dubai World and Dubai Holding, would peak at 6 per cent, up from about 4.5 per cent at present.
Goldman tweaked its price target to Dh5.01, a decrease of 8 fils but still a 55 per cent premium on the current price of Dh3.23 a share.
"Although higher liquidity levels have temporarily impacted interest income growth, we anticipate margins to recover in the medium term as the bank gradually redeploys liquidity," the Goldman report said.
ghunter@thenational.ae
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
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Killing of Qassem Suleimani
SQUADS
Pakistan: Sarfraz Ahmed (capt), Azhar Ali, Shan Masood, Sami Aslam, Babar Azam, Asad Shafiq, Haris Sohail, Usman Salahuddin, Yasir Shah, Mohammad Asghar, Bilal Asif, Mir Hamza, Mohammad Amir, Hasan Ali, Mohammad Abbas, Wahab Riaz
Sri Lanka: Dinesh Chandimal (capt), Lahiru Thirimanne (vice-capt), Dimuth Karunaratne, Kaushal Silva, Kusal Mendis, Sadeera Samarawickrama, Roshen Silva, Niroshan Dickwella, Rangana Herath, Lakshan Sandakan, Dilruwan Perera, Suranga Lakmal, Nuwan Pradeep, Vishwa Fernando, Lahiru Gamage
Umpires: Ian Gould (ENG) and Nigel Llong (ENG)
TV umpire: Richard Kettleborough (ENG)
ICC match referee: Andy Pycroft (ZIM)
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
UAE currency: the story behind the money in your pockets
Key facilities
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- Premier League-standard football pitch
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ONCE UPON A TIME IN GAZA
Starring: Nader Abd Alhay, Majd Eid, Ramzi Maqdisi
Directors: Tarzan and Arab Nasser
Rating: 4.5/5
Company name: Play:Date
Launched: March 2017 on UAE Mother’s Day
Founder: Shamim Kassibawi
Based: Dubai with operations in the UAE and US
Sector: Tech
Size: 20 employees
Stage of funding: Seed
Investors: Three founders (two silent co-founders) and one venture capital fund
Global Fungi Facts
• Scientists estimate there could be as many as 3 million fungal species globally
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Score
Third Test, Day 1
New Zealand 229-7 (90 ov)
Pakistan
New Zealand won the toss and elected to bat
Museum of the Future in numbers
- 78 metres is the height of the museum
- 30,000 square metres is its total area
- 17,000 square metres is the length of the stainless steel facade
- 14 kilometres is the length of LED lights used on the facade
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