ENBD says won't slow foreign expansion
Dubai, April 26, 2013
The head of Dubai's largest bank, Emirates NBD, said on Thursday its ambition to expand abroad would not end with his departure at the end of the year.
The lender, which wants to make a fifth of its revenue outside the UAE within five years, aims to complete a $500 million purchase of BNP Paribas' Egyptian assets by the middle of May, Rick Pudner told reporters.
Pudner was speaking at the bank's first-quarter results conference call on Thursday, days after ENBD announced he would leave the bank when his contract ends in December.
Speculation soon mounted over his likely successor, with bankers saying that if an experienced international industry figure was chosen, that would suggest ENBD was still keen to become a serious regional player.
A local appointment, on the other hand, might suggest the bank is tempering its foreign ambitions to focus on its local role.
Pudner, who has led ENBD since 2006, said his departure would not affect the bank's expansion plans, which include new representative offices in Asia and possible further acquisitions.
"I don't think you will see any change in direction as the strategy is supported by the board and (the new CEO) is very much a board decision," said Pudner.
A team has been established to advise the board on his successor.
ENBD, like Dubai, is recovering from the bursting of a real estate bubble and debt crisis that saw billions of dollars of debt at Dubai state-linked entities restructured.
The bank, which is majority-owned by state fund Investment Corp of Dubai, reported a 31-percent jump in first-quarter net profit on Thursday, beating an average analyst forecast, as impairments declined.
It made a net profit of 837 million dirhams ($227.9 million) in the three months to March 31. The analysts had expected 676 million dirhams.
Bad loan provisions for the opening quarter stood at 888 million dirhams, down from 1.1 billion dirhams last year. The lender was hit hard by impairments in the latter half of 2011 and the first six months of 2012, which dragged down profits.
"Provisions were lower by 19 percent year on year and could have been lowered further had the bank not opted to add voluntarily to its general provisions," said Naveed Ahmed, senior financial analyst at Global Investment House in a note.
ENBD said it had repaid 3 billion of 12.6 billion dirhams it received in support from the United Arab Emirates government after the global financial crisis struck.
It priced a $750 million subordinated bond in March, which was expected to help repay part of the aid.
Other UAE banks have also made repayments this year, including National Bank of Abu Dhabi and First Gulf Bank, as the capital instruments the support was converted into are diminishing in value.
Chief Financial Officer Surya Subramanian told reporters that the bank had no target date for paying off the remaining 9.6 billion dirhams, but said it could use its own cash or raise further funding from the bond market. -Reuters