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Dubai's largest bank sees profit plunge over COVID-19 impact

Dubai's largest bank sees profit plunge over COVID-19 impact

Dubai's fountain show beneath the Burj Khalifa, the world's tallest tower AFP/Karim SAHIB

DUBAI: Emirates NBD, Dubai's largest bank, said on Monday (Jul 20) its net profits plunged in the second quarter as it made huge provisions to counter the potential impact of the COVID-19 crisis.

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

Its net profit in the six months ending June 2020 also slumped by 45.3 per cent to US$1.1 billion from US$2 billion the same period last year, it said in a statement.

The bank said it has set aside US$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 US$2.2 billion of interest and principal for periods of up to six months.

The UAE's central bank said on Apr 5 that it had doubled to US$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 per cent to US$189.2 billion from US$146.5 billion a year ago, mainly due to the purchase of Turkish lender DenizBank.

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Source: AFP/ad

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