Emirates NBD, Dubai’s biggest bank, posted a 10 per cent increase in fourth quarter net profit as interest income rose, but the results slightly missed analysts' estimates.
The bank, the first UAE lender to report quarterly results, made a net profit of Dh2.39 billion in the three months ended December 31, it said on Wednesday.
The results missed the median estimate of Dh2.44bn from four analysts polled by Bloomberg.
Total income rose 11 per cent to Dh4.5bn during the period, led by a 20 per cent uptick in net interest income to Dh3.35bn, offsetting an 8 per cent drop in non-interest income to Dh1.15bn.
"Margins widened 35 bps [basis points] in 2018 as rate rises flowed through to the loan book which more than offset a rise in funding costs," group chief executive Shayne Nelson said. "The group’s balance sheet remains healthy with a further strengthening in capital coupled with strong liquidity and stable credit quality."
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Read more:
UAE private sector economy slows in December on lower output and orders
Emirates NBD third quarter net profit soars 16%, beating analysts' estimates
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Provisions for bad loans rose 19 per cent to Dh640 million due to higher cost of risk during the period, and operating expenses increased 14 per cent to Dh1.5bn, partly due to higher staff and IT costs related to the bank's digital transformation.
“Costs were also higher as a result of international branch expansion, VAT, advertising and Expo 2020 sponsorship,” the lender said.
Gross loans grew 9 per cent to Dh360bn at the end of last year from a year earlier, while deposits rose 7 per cent to Dh348bn.
The bank achieved a milestone as total assets surpassed Dh500bn for the first time, up by 6 per cent from the end of 2017.
"Earnings were in line with our estimate of Dh2.3bn, with lower provisioning compensating for weaker-than-expected revenue," said EFG Hermes in a note on Wednesday.
Rating agency Moody's Investors Service assigned Arabian Gulf banks a stable outlook for 2019 on the back of improving operating conditions, strong capital and weakening but still solid lending.
Banks in the UAE are expected to remain resilient, Moody's said in a report last December.
Emirates NBD, which has operations in Egypt, Saudi Arabia, India, Singapore, the United Kingdom, and representative offices in China and Indonesia, is expanding its footprint to boost revenue amid limited opportunities for growth in the UAE market, where more than 50 lenders operate.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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UK’s AI plan
- AI ambassadors such as MIT economist Simon Johnson, Monzo cofounder Tom Blomfield and Google DeepMind’s Raia Hadsell
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Safety 'top priority' for rival hyperloop company
The chief operating officer of Hyperloop Transportation Technologies, Andres de Leon, said his company's hyperloop technology is “ready” and safe.
He said the company prioritised safety throughout its development and, last year, Munich Re, one of the world's largest reinsurance companies, announced it was ready to insure their technology.
“Our levitation, propulsion, and vacuum technology have all been developed [...] over several decades and have been deployed and tested at full scale,” he said in a statement to The National.
“Only once the system has been certified and approved will it move people,” he said.
HyperloopTT has begun designing and engineering processes for its Abu Dhabi projects and hopes to break ground soon.
With no delivery date yet announced, Mr de Leon said timelines had to be considered carefully, as government approval, permits, and regulations could create necessary delays.
WRESTLING HIGHLIGHTS
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
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Desert Warrior
Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
Director: Rupert Wyatt
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Timeline
2012-2015
The company offers payments/bribes to win key contracts in the Middle East
May 2017
The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts
September 2021
Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act
October 2021
Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence
December 2024
Petrofac enters into comprehensive restructuring to strengthen the financial position of the group
May 2025
The High Court of England and Wales approves the company’s restructuring plan
July 2025
The Court of Appeal issues a judgment challenging parts of the restructuring plan
August 2025
Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision
October 2025
Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange
November 2025
180 Petrofac employees laid off in the UAE
