Emirates NBD Loans to Dubai Rose 10% in 2011 as Economy Expanded
February 16, 2012, 12:07 AM ESTBy Arif Sharif
Feb. 15 (Bloomberg) -- Emirates NBD PJSC’s loans to the Dubai government grew 10 percent last year as accelerating economic growth boosted lending opportunities of the United Arab Emirates’ biggest bank.
Loans to the Persian Gulf emirate’s government and its departments rose to 59.4 billion dirhams ($16 billion) in the year ended Dec. 31 compared with 54 billion dirhams a year earlier, the Dubai-based bank said in its annual results statement today. That represents about 29 percent of its total loans compared with 27.5 percent a year earlier, the data show.
Dubai’s economy expanded more than 3 percent last year, Sheikh Ahmed bin Saeed Al Maktoum, head of Dubai’s Supreme Fiscal Policy Committee, said today. The economy may grow 4.5 percent in 2012, he said.
Emirates NBD’s bad loans have risen as it deals with exposure to debt restructuring by state-owned companies including Dubai World, which shook global markets in 2009 with its request to delay payments on $25 billion in loans. Dubai and related companies have $10.3 billion in debt maturing this year, Bank of America Merrill-Lynch estimates in October show.
Emirates NBD, which is 55.6 percent owned by Dubai’s government, reported a 62 percent decline in fourth-quarter profit today, below analysts’ estimates, as it boosted provisions for bad loans. Its full-year profit rose 8.2 percent as net interest income climbed 7 percent.
Loans to the Investment Corp. of Dubai, Emirates NBD’s parent company and one of Dubai’s main state-owned holding companies, increased by 1.29 billion dirhams last year, the data show.
--Editors: Daliah Merzaban, Shanthy Nambiar
To contact the reporters on this story: Arif Sharif in Dubai at asharif2@bloomberg.net;
To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net
