Investors are watching carefully as Emirates NBD prepares to report full-year earnings today, detailing for the first time the impact of its acquisition of Dubai Bank last year.
The UAE's biggest bank by assets faced a difficult third quarter after writing off more than Dh1.5 billion (US$408 million) of bad debts.
The key factor for the bank's full-year earnings would be whether levels of provisioning worsened in the fourth quarter, said Raj Madha, a financial analyst at Rasmala Investment Bank.
"I wouldn't expect the fourth-quarter earnings to be good," he said. "This will be a watershed quarter for the bank."
Analysts' estimates are for quarterly earnings of Dh172m, down 1.6 per cent from a year earlier.
Emirates NBD's takeover of Dubai Bank will be closely scrutinised, analysts said.
"They'll probably need to put in some capital, or Dubai Bank could rely on Emirates NBD's capital to survive," said Shabbir Malik, a financial analyst at EFG-Hermes.
Emirates NBD's share price has fallen 21.5 per cent to Dh2.98 since the takeover was announced in October.
During the same period, the benchmark Dubai Financial Market General Index has risen 10.7 per cent. The bank's shares rose 1 per cent yesterday.
Dubai Bank was rescued by the emirate's Government in May. The Islamic lender is believed to have buckled under the weight of debts owed by its then-largest shareholder, Dubai Group.
Dubai Group, a unit of Dubai Holding, is in the process of restructuring $10bn of liabilities.
How the acquisition fits alongside the loss-making Emirates Islamic Bank will be keenly watched by analysts, with many suspecting a merger of the two.
"We're expecting that there would be further information about the integration of Emirates Islamic Bank and Dubai Bank," Mr Madha said.
Several high-profile departures from Emirates NBD have occurred in the past few weeks as part of a management shake-up initiated by Sheikh Ahmed bin Saeed Al Maktoum,who was appointed chairman in June.
Last week, Emirates NBD announced the resignation of Abdul Wahed Al Fahim, the bank's deputy chief executive.
His departure followed that of Suresh Kumar, the chief executive of the bank's investment banking unit, Emirates NBD Capital, who left a month earlier.
They were joined by John Eldredge, the bank's general manager of global markets and treasury.
The bank is also expected to field questions on its restructuring agreement with Union Properties.
ghunter@thenational.ae
Cryopreservation: A timeline
- Keyhole surgery under general anaesthetic
- Ovarian tissue surgically removed
- Tissue processed in a high-tech facility
- Tissue re-implanted at a time of the patient’s choosing
- Full hormone production regained within 4-6 months
RESULT
Liverpool 4 Southampton 0
Jota (2', 32')
Thiago (37')
Van Dijk (52')
Man of the match: Diogo Jota (Liverpool)
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%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%203.0-litre%20six-cylinder%20turbo%20(BMW%20B58)%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20340hp%20at%206%2C500rpm%3Cbr%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20500Nm%20from%201%2C600-4%2C500rpm%3Cbr%3E%3Cstrong%3ETransmission%3A%3C%2Fstrong%3E%20ZF%208-speed%20auto%3Cbr%3E%3Cstrong%3E0-100kph%3A%3C%2Fstrong%3E%204.2sec%3Cbr%3E%3Cstrong%3ETop%20speed%3A%3C%2Fstrong%3E%20267kph%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh462%2C189%3Cbr%3E%3Cstrong%3EWarranty%3A%3C%2Fstrong%3E%2030-month%2F48%2C000k%3C%2Fp%3E%0A
Will the pound fall to parity with the dollar?
The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.
Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.
New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.
“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.
The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.
The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.
Bloomberg
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
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Reading List
Practitioners of mindful eating recommend the following books to get you started:
Savor: Mindful Eating, Mindful Life by Thich Nhat Hanh and Dr Lilian Cheung
How to Eat by Thich Nhat Hanh
The Mindful Diet by Dr Ruth Wolever
Mindful Eating by Dr Jan Bays
How to Raise a Mindful Eaterby Maryann Jacobsen
UAE currency: the story behind the money in your pockets
How to avoid crypto fraud
- Use unique usernames and passwords while enabling multi-factor authentication.
- Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
- Avoid suspicious social media ads promoting fraudulent schemes.
- Only invest in crypto projects that you fully understand.
- Critically assess whether a project’s promises or returns seem too good to be true.
- Only use reputable platforms that have a track record of strong regulatory compliance.
- Store funds in hardware wallets as opposed to online exchanges.
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.