Emirates NBD, the country's largest bank by assets, saw its annual net profit drop by 7 per cent to Dh3.68 billion (US$1bn) last year, following write-downs on investments.
The first Dubai-based bank to report its profits, Emirates NBD is the only lender in the Emirates so far to report a drop in net profit for last year. Several have reported a decline in earnings during the final quarter of last year due to the global financial crisis, and provisions taken against the possibility that their loan quality could deteriorate.
"The UAE economy is expected to slow down which will impact banking asset and income growth in 2009," said Rick Pudner, the chief executive of Emirates NBD. "The current environment is presenting challenges in terms of liquidity, funding, profitability and asset quality."
Emirates NBD's fourth-quarter net profit shrank by 98 per cent to Dh14m, compared with Dh1.2bn during the same period in 2007. The decline in profit was due in part to write-downs and impairments which totalled Dh2.26bn. Of that, Dh455m was on credit default swaps.
The bank was formed in October 2007 out of the merger of Emirates Bank International and National Bank of Dubai. Mr Pudner said Emirates NBD "[is] the consolidator of choice in the region and is well placed to take advantage of any attractive opportunities that will emerge over the course of this year".
The rest of the country's banks are expected to report their 2008 results within the next few weeks. Mashreqbank, the country's fifth largest bank by assets, is expected to report on Sunday.
According to Mr Pudner, last year Emirates NBD received Dh12.6bn in emergency liquidity in the form of three and five-year deposits from the Ministry of Finance, which is still expected to inject an additional Dh20bn into Emirates banks within the next few months.
"I see the Dh12.6bn as a real positive. People worry that Dubai has been neglected, that there is not tangible evidence of any help coming to Dubai from the federal level. Clearly that is not the case," said Ali Khan, the director of Arqaam Capital.
The bank took provisions "on the assumption that the economy is going to get worse before it gets better", Mr Pudner said. Non-performing loans made up 1 per cent of the bank's Dh213.1bn loan portfolio at the end of last year, but that figure was expected to increase this year.
Property and construction loans made up 15 per cent of the loan portfolio, with personal retail loans accounting for an additional 12 per cent. Since some home buyers may have used personal loans to finance property purchases, analysts said there was still some uncertainty over the full extent of the bank's exposure to the property sector.
Mr Pudner said "a correction is evident in the Dubai real estate sector, but we remain comfortable with our overall exposure and draw comfort from our prudent credit and underwriting standards".
Property developers Emaar, Dubai Properties and Nakheel accounted for 77 per cent of the mortgages financed by the bank. "We know they are a Dubai bank, and that they therefore operate in Dubai, but none of these developers are doing very well, so 77 per cent is a big number," a Dubai-based analyst said. Emaar yesterday reported a fourth-quarter net loss of Dh1.77bn.
Emirates NBD's capital adequacy ratio was 11.1 per cent at the end of last year, down from 12.5 per cent in 2007. Total assets rose 11 per cent to Dh282.4 billion last year, from Dh253.8 billion at the end of 2007. The board of directors would recommend a 20 per cent cash dividend and a 10 per cent stock dividend to shareholders for the 2008 financial year, the bank said.
Trading on Emirates NBD shares was suspended yesterday, awaiting the results. On Wednesday, the share price closed at Dh3.12.
tpantin@thenational.ae
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
if you go
The flights
The closest international airport to the TMB trail is Geneva (just over an hour’s drive from the French ski town of Chamonix where most people start and end the walk). Direct flights from the UAE to Geneva are available with Etihad and Emirates from about Dh2,790 including taxes.
The trek
The Tour du Mont Blanc takes about 10 to 14 days to complete if walked in its entirety, but by using the services of a tour operator such as Raw Travel, a shorter “highlights” version allows you to complete the best of the route in a week, from Dh6,750 per person. The trails are blocked by snow from about late October to early May. Most people walk in July and August, but be warned that trails are often uncomfortably busy at this time and it can be very hot. The prime months are June and September.
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
MATCH INFO
Manchester City 3
Danilo (16'), Bernardo Silva (34'), Fernandinho (72')
Brighton & Hove Albion 1
Ulloa (20')
UAE currency: the story behind the money in your pockets
THE BIO
Family: I have three siblings, one older brother (age 25) and two younger sisters, 20 and 13
Favourite book: Asking for my favourite book has to be one of the hardest questions. However a current favourite would be Sidewalk by Mitchell Duneier
Favourite place to travel to: Any walkable city. I also love nature and wildlife
What do you love eating or cooking: I’m constantly in the kitchen. Ever since I changed the way I eat I enjoy choosing and creating what goes into my body. However, nothing can top home cooked food from my parents.
Favorite place to go in the UAE: A quiet beach.
The Energy Research Centre
Founded 50 years ago as a nuclear research institute, scientists at the centre believed nuclear would be the “solution for everything”.
Although they still do, they discovered in 1955 that the Netherlands had a lot of natural gas. “We still had the idea that, by 2000, it would all be nuclear,” said Harm Jeeninga, director of business and programme development at the centre.
"In the 1990s, we found out about global warming so we focused on energy savings and tackling the greenhouse gas effect.”
The energy centre’s research focuses on biomass, energy efficiency, the environment, wind and solar, as well as energy engineering and socio-economic research.
Election pledges on migration
CDU: "Now is the time to control the German borders and enforce strict border rejections"
SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom"
Electric scooters: some rules to remember
- Riders must be 14-years-old or over
- Wear a protective helmet
- Park the electric scooter in designated parking lots (if any)
- Do not leave electric scooter in locations that obstruct traffic or pedestrians
- Solo riders only, no passengers allowed
- Do not drive outside designated lanes
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
COMPANY PROFILE
Name: Lamsa
Founder: Badr Ward
Launched: 2014
Employees: 60
Based: Abu Dhabi
Sector: EdTech
Funding to date: $15 million
Name: Brendalle Belaza
From: Crossing Rubber, Philippines
Arrived in the UAE: 2007
Favourite place in Abu Dhabi: NYUAD campus
Favourite photography style: Street photography
Favourite book: Harry Potter
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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
THE BIO
Born: Mukalla, Yemen, 1979
Education: UAE University, Al Ain
Family: Married with two daughters: Asayel, 7, and Sara, 6
Favourite piece of music: Horse Dance by Naseer Shamma
Favourite book: Science and geology
Favourite place to travel to: Washington DC
Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.
The specs: 2018 Ducati SuperSport S
Price, base / as tested: Dh74,900 / Dh85,900
Engine: 937cc
Transmission: Six-speed gearbox
Power: 110hp @ 9,000rpm
Torque: 93Nm @ 6,500rpm
Fuel economy, combined: 5.9L / 100km
If you go
Flying
Despite the extreme distance, flying to Fairbanks is relatively simple, requiring just one transfer in Seattle, which can be reached directly from Dubai with Emirates for Dh6,800 return.
Touring
Gondwana Ecotours’ seven-day Polar Bear Adventure starts in Fairbanks in central Alaska before visiting Kaktovik and Utqiarvik on the North Slope. Polar bear viewing is highly likely in Kaktovik, with up to five two-hour boat tours included. Prices start from Dh11,500 per person, with all local flights, meals and accommodation included; gondwanaecotours.com
OPINIONS ON PALESTINE & ISRAEL
