Emirates NBD sees profit nosedive

Dubai's largest bank sees its net profits plunge in second quarter due to impact of coronavirus pandemic on UAE’s economy.

DUBAI - Emirates NBD, Dubai's largest bank, said on Monday its net profits plunged in the second quarter as it made huge provisions to counter the potential impact of the coronavirus crisis.

The United Arab Emirates' second-largest lender saw its net profit in the second quarter this year dive by 58 percent to $545 million from $1.3 billion a year ago.

Its net profit in the six months ending June 2020 also slumped by 45.3 percent to $1.1 billion from $2.0 billion the same period last year, it said in a statement.

The bank said it has set aside $1.14 billion in impairments for potential risks from the coronavirus pandemic.

"The Group increased impairment allowances... in anticipation of a potential deterioration in credit quality in subsequent quarters related to the coronavirus pandemic," it said.

CEO Shayne Nelson said the bank provided support to one-tenth of customers primarily through the deferral of over $2.2 billion of interest and principal for periods of up to six months.

The 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 the novel coronavirus pandemic.

The bank's total assets by the end of June rose 29 percent to $189.2 billion from $146.5 billion a year ago, mainly due to the purchase of Turkish lender DenizBank.