* Nelson comfortable with Dubai exposure
* Will wind down some to meet new central bank rules
* 2014 loan growth forecast 7-8 pct - CFO
* No plans for acquisitions until mid-2015 at least - CEO
* Q4 net profit 673 mln dhs vs 626 mln dhs yr-ago
* Misses forecast as provisions jump 40 pct y-o-y (Recasts, adds conference call details, share price)
By David French
DUBAI, Jan 27 (Reuters) - The new chief executive of Emirates NBD said he wasn't worried about the bank's exposure to Dubai and state-linked entities, but it would need to wind down some of those positions to comply with new regulations.
Around 38.2 percent of ENBD's total lending of 238.3 billion dirhams ($64.9 billion) was allocated to the Dubai government at the end of 2013, according to the bank's latest financial statement, released on Monday. ENBD, the emirate's largest lender, is 55.6 percent owned by the state fund Investment Corp of Dubai.
Links to state borrowers have crimped ENBD's profitability in recent years. It was forced to set aside billions of dirhams to cover loan losses following debt restructurings at entities such as Dubai World and Dubai Group.
That raised questions over the bank's concentration risk. To prevent the same problem occurring again at lenders in the United Arab Emirates, the country's central bank outlined new rules last year which would cap the permitted exposure to state-linked entities.
Shayne Nelson, in his first public comments since becoming CEO Jan. 1, said he wasn't worried about how much cash the bank has committed to state borrowers.
"I'm not uncomfortable with the exposure that we have to Dubai," Nelson, formerly head of Standard Chartered's private bank, told reporters on a conference call. "However, with the new central bank legislation that's on the way around exposures, we will need to wind some of that down over the next five years until we get to the required ratios."
Asked whether reductions would include selling loans or not renewing existing exposure, Nelson said he couldn't talk about how the bank would deal with a specific client.
Dubai was hit by a real estate crash and debt crises at state-linked entities at the end of the last decade. The economy rebounded last year, with the value of the stock market doubling and house prices growing at one of the fastest rates globally.
ENBD is expecting 2014 loan growth of around 7-8 percent, finance chief Surya Subramanian said on the call. That is above the 6-7 percent forecast for the year in October but below the 9 percent recorded in 2013.
However, ENBD is not expected to seek further acquisitions until it finishes integrating BNP Paribas' Egyptian assets, which it bought last year, Nelson said. The integration will take until mid-2015, he said.
The bank, like most larger Gulf lenders, has been looking to expand to find sources of revenue outside the highly competitive local markets.
The improving economic picture helped boost net interest income, but a 40 percent jump in impairment allowances meant ENBD's fourth-quarter net profit fell short of forecasts, rising just 8 percent.
The bank made 673 million dirhams in the three months to Dec. 31, a statement from the bank said, compared with 626 million dirhams in the same period last year. An average of five analysts polled by Reuters had forecast a net profit of 705.9 million dirhams.
Fuelling the profit growth was a 26 percent increase in net interest income versus the same period a year before, which the bank attributed to higher lending growth and lower funding costs. But impairments rose to 1.31 billion dirhams year-on-year, as the bank took provisions and built up its coverage ratios.
ENBD's share price slipped 2.1 percent on Monday, part of a widespread decline that saw the Dubai bourse finish 1.2 percent lower.
($1 = 3.6730 UAE dirhams) (Reporting by David French; Editing by Larry King)