Dubai’s Emirates NBD (EBND) reported net profits of AED 3.5bn ($953mn), up 42% YoY for Q2 on strong retail lending driven by an improving operating environment. Total income stood at AED 7.8bn ($2.1bn), up 47% YoY on improved loan mix and cheaper deposits with higher interest rates feeding through to margins. Net impairment loss on financial assets declined from AED 851mn ($231.7mn) to AED 460mn ($125.2mn). As of June, the NPL ratio stood at 6.1%, down 30bp on strong write-backs and recoveries as the economy strengthens. Emirates NBD and its group company Emirates Islamic together now have 30% market share of the UAE Debit and Credit Card spend. During the quarter, EBND was upgraded to A2 from A3 by Moody’s. Its CET1 ratio stood at 15%.

Emirates NBD’s USD 4.25% Perp was marginally higher, 03 0.15 points to 91.69, yielding 6.37%.

UAE lender, First Abu Dhabi Bank (FAB) reported a 1% YoY increase in net profit to AED 2.9bn ($790mn) for Q2. Compared to Q1, profits declined 43% as the bank reported a gain of AED 2.8bn ($780mn) on a subsidiary stake sale in Q1. Net interest income rose 21% YoY to AED 3.4bn ($930mn) while non-interest income fell 34% to AED 1.6bn ($440mn). Impairment charges were 14% lower to AED 582mn ($158mn). During the quarter, total assets rose 10% to AED 1tn ($283bn) and loans, advances, and Islamic financing rose 15% to AED 459bn ($125bn). Its NPL ratio improved 40bp YoY to 3.6% and the Net interest margin rose 6bp YoY to 1.6%. FAB’s CET1 ratio came in at 12.6%, 39bp lower YoY.

FAB’s 4.5% Perps traded up 0.31 points at 96.94 yielding 5.43%.

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