Emirates NBD Shares Drop After Lower Half-Year Profit

Post by : Monika

Photo: Reuters

Dubai’s biggest bank, Emirates NBD, has shared its financial results for the first half of 2025. The bank’s net profit dropped by 9% compared to the same period last year. In the first half of 2024, Emirates NBD had earned 13.8 billion dirhams. But in the first half of 2025, the profit came down to 12.5 billion dirhams.

This fall in profit was mainly due to two reasons. First, the bank was able to collect less money from old unpaid loans. Second, the bank had to pay more in taxes because of new rules in the country. These two problems reduced the total earnings.

Why Recoveries Dropped:

Recoveries mean the money a bank gets back when someone repays a loan that they had not paid earlier. In 2024, Emirates NBD had received a large amount of money through these recoveries. That helped the bank earn more profit. But this year, in 2025, the bank got 2 billion dirhams less from such recoveries.

Because the bank could not recover as much money from unpaid loans as before, its total earnings went down. This was one of the main reasons behind the drop in profit.

Taxes Also Affected Profit:

Another big reason for the fall in profit was the increase in taxes. The government in the United Arab Emirates introduced a higher tax rate. This meant that the bank had to give more of its earnings to the government. So, even though the bank earned money in many areas, it could not keep as much for itself.

These two issues — lower recoveries and higher taxes — together made the bank’s profit smaller this year.

Some Good News Too:

Even though the profit dropped, not everything was bad for Emirates NBD. In fact, there were some good signs too. The bank’s total income went up. That means it earned more money from its day-to-day business. It also gave out more loans and collected more interest from borrowers.

The total amount of loans given by the bank grew by around 12%. Now, the total value of loans given out has reached 570 billion dirhams. This shows that more people and businesses are borrowing money from Emirates NBD, which means they trust the bank.

Not only did loans go up, but deposits also increased. Deposits are the money that people and companies keep in the bank. These deposits rose by about 18%, reaching a total of 737 billion dirhams. This is also a positive sign. It means customers still believe in the bank and want to keep their money there.

Net Interest Margin Falls:

There was one more area where the bank faced pressure — the net interest margin. This is a way to measure how much profit the bank makes from the difference between interest it earns and interest it pays.

In 2025, this number dropped to 3.47%. That is the lowest level since 2022. One big reason for this fall was higher interest rates in Turkey. Emirates NBD owns a bank in Turkey called DenizBank. Because interest rates went up in Turkey, the bank earned less profit from loans in that country.

Important Numbers to Know:

• Here is a quick summary of Emirates NBD’s key numbers for the first half of 2025:
• Net profit: 12.5 billion dirhams — down 9% from last year’s 13.8 billion dirhams
• Recoveries: 2 billion dirhams less than last year
• Total assets: 1.09 trillion dirhams — a 17% increase
• Gross loans: 570 billion dirhams — up 12%
• Deposits: 737 billion dirhams — up 18%
• Net interest margin: 3.47% — the lowest since 2022

What This Means for Customers:

Even though the bank’s profit fell, the increase in loans and deposits shows that the bank is still strong. For customers, this means they can still trust Emirates NBD with their money. But because the bank is earning less profit, it might make some small changes.

For example, the bank could raise the cost of taking loans, or reduce the interest it pays on savings. There may also be some changes in service charges. These changes would help the bank manage its costs better.

Stock Market Reaction:

Before the bank’s results were shared, Dubai’s stock market dropped slightly. This showed that investors were unsure about how the bank would perform. Once the results were out, the bank’s share price also went down. However, over a longer period, the shares have stayed stable, supported by the bank’s strong loan and deposit growth.

Real Estate Worries:

Some experts are warning that property prices in Dubai could drop later this year or next year. This matters for Emirates NBD because it gives out many loans for real estate. If property prices go down, people may struggle to repay loans, and that could affect the bank. Still, the rise in assets and customer deposits may help protect the bank from serious problems.

What’s Next for the Bank?

• Looking ahead, there are a few important things to watch:
• Recoveries: Will the bank be able to collect more unpaid loans in the next few months?
• International Business: How will rising interest rates in places like Turkey affect profits from overseas banks?
• Property Market: If real estate prices fall, the bank could face risks in loan repayments.
• Taxes and Costs: If the government increases taxes again, the bank may need to control its spending more tightly.

Emirates NBD’s financial report for the first half of 2025 shows a mix of good and bad news. On one hand, profits fell because of fewer recoveries and higher taxes. On the other hand, the bank grew in important areas like loans, deposits, and total assets.

This shows that the bank is still strong and trusted by customers. But to keep profits steady, it will need to manage its costs well and recover more money from past loans. Customers might see small changes in loan rates or savings interest, but overall, the bank remains a major player in the region’s financial world.