* To begin repaying 12.6 bln dhs of govt support -CEO
* BNP's Egypt unit buy awaiting regulator nod
* Q4 net profit more than triple 2011, beats forecast
* 2012 net profit up 3 pct y-o-y
* Impairments down y-o-y 11 pct in Q4, 20 pct in 2012
(Recasts, adds CEO, CFO comments)
By David French
DUBAI, Jan 31 Emirates NBD, Dubai's
biggest bank, said it will start repaying part of the 12.6
billion dirhams it received from the government in 2008, after
reporting forecasting-beating quarterly results.
The United Arab Emirates' Ministry of Finance placed 70
billion dirhams ($19.1 billion) with banks to shore up their
balance sheets in the wake of the global financial crisis.
The method of support, in the form of capital-boosting bonds
sold to the government, are losing their value as they head
towards maturity, meaning it's in the interest of the bank to
replace them with cash raised in current favourable conditions
instead of waiting and having to act more drastically later.
"We will have to do something about it at some point because
no bank wants to fall off a capital cliff down the line," Surya
Subramanian, ENBD's chief financial officer, told a media call.
While ENBD has yet to repay any of the cash it received,
other banks in the UAE have started addressing the bonds, which
boost Tier 2, or supplementary, capital.
National Bank of Abu Dhabi, the UAE's largest bank
by market value, said on Tuesday it had 3 billion dirhams
outstanding at the end of 2012, having repaid 2.6 billion
dirhams in the second half of last year.
ENBD Chief Executive Rick Pudner said the bank was still
awaiting regulatory approvals for its $500 million purchase of
BNP Paribas' Egyptian assets and he expected the deal
to be completed at the end of the first quarter or beginning of
ENBD on Thursday posted a fourth-quarter net profit more
than triple the same period of 2011 on the back of lower
impairments and increased non interest income.
The lender, 55.6 percent owned by state fund Investment Corp
of Dubai, made 625 million dirhams in the three months to
December 31, a statement from the bank said, compared with 152
million dirhams in the same period of 2011.
The result beat the average forecast of five analysts polled
by Reuters, who expected 484 million dirhams.
Full-year profit for 2012 also rose, reaching 2.55 billion
dirhams against 2.48 billion dirhams in 2011.
The lender has been heavily hit by impairment allowances in
recent quarters - particularly in the latter half of 2011 and
the first six months of 2012 - but provisions for the final
three months of 2012 period were down 11 percent year-on-year.
State-linked entities have done much of the damage and ENBD
has increased its provision coverage for Dubai Group, one of the
last restructurings still outstanding, to 54 percent of its 4.6
billion dirhams exposure from 34 percent at September-end.
Bankers said at the beginning of January that Dubai Group
had agreed a deal with four dissenting creditors who had begun
unprecedented legal action against the firm, paving the way for
a $10 billion restructuring.
However, as improvements are seen in sectors of the local
economy, the bank was benefiting from writebacks on loans
previously classed as impaired, including the repayment of a 1
billion dirhams loan from one unnamed corporate, Ben
Franz-Marwick, head of investor relations, said.
Loan growth was forecast for 5 percent in 2013, Pudner said,
after a 7 percent increase last year.
($1=3.6730 UAE dirhams)
(Additional reporting by Mirna Sleiman; Editing by Dinesh Nair
and Mike Nesbit)