Emirates NBD announced today, Monday, the second-quarter profit decline of 58%, with the largest Dubai banks making provisions higher in anticipation of additional repercussions of the Corona pandemic.
Net profit fell to two billion dirhams ($ 544.54 million) in the three months to June 30, compared to 4.74 billion dirhams a year earlier.
At the level of the first six months of the year, the bank’s profits fell by 45% to $ 1.1 billion, compared to the same period last year.
"We are still seeking to adjust costs to reflect the low levels of economic activity, although the cost reduction will not fully offset the low income level," the group's chief financial officer, Patrick Sullivan, said in a statement.
In June, sources told Reuters that Emirates NBD started a second round of job cuts, cutting hundreds of employees.
Banks in the UAE have been hit by the government's crackdown on curbing an outbreak of the Corona virus, which has forced many companies to stop.
Many of these restrictions were eased last May, but Dubai - which does not have oil wealth like Abu Dhabi - remains particularly vulnerable, as its economy depends on tourism, transportation and trade.
The bank said that provisions for impairment increased to 4.2 billion dirhams at the end of last June, up from 2.6 billion dirhams in the first quarter, while the net cost of risk annually reached 172 basis points. The non-performing loan ratio was 5.8% at the end of the second quarter.
"Emirates NBD continues to have a good operating performance, and is based on a strong balance sheet that supports it in overcoming these challenges arising from low interest rates, low oil prices and weakening economic growth due to the pandemic," Sullivan said.
Emirates NBD is one of the largest banks in the MENA region in terms of assets, and it works to provide banking services in the UAE, Egypt, Saudi Arabia, Singapore and the United Kingdom, and it has representative offices in India, China and Indonesia.