National Bank of Abu Dhabi, the largest lender in the United Arab Emirates, reported a 32% rise in third quarter net profit yesterday, helped by higher non-interest income and needing to set aside less cash for bad loans.

Bumper estimate-beating third quarter earnings have been posted across the UAE banking sector, with lenders benefiting from a strong domestic economic backdrop and improving asset quality since a downturn at the start of the decade.

On Monday, First Gulf Bank, Mashreq and Union National Bank reported respective year-on-year net profit gains of 20%, 26% and 22%, maintaining the positive picture painted by banks who published numbers earlier in the reporting period.

NBAD, almost 70% owned by Abu Dhabi’s government, made a net profit of 1.37bn dirhams ($373mn) in the three months to September 30, up from 1.03bn dirhams in the corresponding period of 2013, the bank said in a statement.

Six analysts polled by Reuters earlier this month forecast an average net profit of 1.35bn dirhams  “Our year-to-date results reflect continued strength in underlying revenue and earnings growth,” Nasser al-Sowaidi, chairman of NBAD, said in the statement.

Quarterly revenues totalled 2.6bn dirhams, up 17.1% over the prior-year period, led by non-interest income – which includes fees and commission – which was nearly 40% higher over the third quarter last year at 774mn dirhams.

Chief Executive Alex Thursby said after the bank’s first quarter earnings that the bank would be focusing on growing its fee income to offset the falling profitability of traditional lending business in the country due to fierce competition among banks flush with cash.

Despite this strategy, total loans by the bank jumped in the third quarter. Year-to-September 30 growth was 7.7%, the bank said yesterday, reversing the 1.1% decline in lending posted in the first six months of 2014.

Net impairment charges fell to 202mn dirhams in the quarter from 299mn dirhams a year ago, continuing the trend of improving asset quality.

 

Du

Du, the United Arab Emirates’ No 2 telecom operator by subscriber numbers, reported a 17.8% rise in third quarter net profit yesterday, in line with analyst estimates as mobile data income and fixed line revenue grew. The firm, which competes with Etisalat, made a net profit of 558.7mn dirhams ($152mn) in the three months to September 30, up from 474.3mn dirhams in the year-earlier period.

Analysts polled by Reuters had on average forecast du would make a quarterly profit of 563.1mn dirhams. Third quarter revenue was 3.03bn dirhams, up from 2.64bn dirhams a year ago.

“Data continued to be a key market driver during the quarter,” Chief Executive Osman Sultan said in the statement. “The world is evolving to incorporate integrated digital services into a commodity that is used throughout every aspect of our daily lives. The issue for the industry however, remains our ability to monetise data.”

Quarterly mobile revenue rose 9% year-on-year to 2.24bn dirhams. Quarterly mobile data revenue was 684mn dirhams, up 11% from a year ago. Fixed line services revenue increased 36% to 598mn over the same period. Du said its average revenue per user (ARPU) – a key industry metric – fell slightly in the third quarter. It did not provide further details, but predicted ARPU would “remain steady over the coming quarters”.

 

 

Dar al-Arkan

Dar al-Arkan, Saudi Arabia’s largest listed real estate developer by market value, reported a 51% fall in third quarter net income yesterday, missing analysts’ forecasts. The company made a net profit of 89.9mn riyals ($24.0mn) in the three months to September 30, down from 183.3mn riyals in the same period a year earlier, it said in a bourse statement.

It attributed the profit slump to falling non-operating income received from deposits, plus rising finance costs and wages.