DUBAI: Dubai’s biggest bank Emirates NBD on Monday posted a 58 percent fall in second-quarter profit, having set aside over $1.1 billion so far this year to cover bad loans in anticipation that the impact of the coronavirus crisis will worsen.
Net profit slumped to 2 billion dirhams ($544.5 million) from 4.74 billion dirhams a year earlier, when it booked a gain of 2.1 billion dirhams from an asset sale.
Chief Financial Officer Patrick Sullivan said while the group was acting to manage costs to reflect softer economic activity, cost cuts would not entirely offset lower income.
Sources told Reuters in June that the bank had started a new round of job cuts, laying off hundreds of employees. One said the pandemic had accelerated a pre-planned process.
UAE Banks Federation Chairman Abdul Aziz Al-Ghurair said customers have moved more toward digital services.
“This will require more investment from the banking sector to improve their digital experience... then they will have to drop some of their services which used to be available manually,” Al-Ghurair said on Monday.
UAE banks have been hit by tough government measures to curb the spread of coronavirus, which forced many businesses to temporarily shutter.
Many restrictions have eased since May, though Dubai, which does not have the oil wealth of Abu Dhabi, remains vulnerable as its economy is heavily dependent on tourism, transport and trade.
Emirates NBD said its impairment allowances had increased to 4.2 billion dirhams by June-end from 2.6 billion in the first quarter, with an annualized net cost of risk of 172 basis points.
Its non-performing loan ratio was 5.8 percent at the end of the second quarter, and its total assets were 694.3 billion dirhams, up 29 percent from a year ago.
The bank’s underlying operating performance remained “good,” and the “robust” balance sheet would help it navigate the challenges of low interest rates, low oil prices and the impact of the pandemic, Sullivan said.
Emirates NBD quarterly profit slumps 58% as coronavirus pandemic provisions jump
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Emirates NBD quarterly profit slumps 58% as coronavirus pandemic provisions jump
- Net profit slumped to 2 billion dirhams from 4.74 billion dirhams a year earlier
- UAE banks have been hit by tough government measures to curb the spread of coronavirus
Unemployment rate in Saudi Arabia drops to 4.4% in Q4 2023: GASTAT
RIYADH: Saudi Arabia’s overall unemployment rate dropped to 4.4 percent in the fourth quarter of 2023, marking a decrease of 0.4 percentage points from the same period in 2022.
When compared with the previous three months, the latest report from the General Authority for Statistics revealed a 0.7 percentage point decline in the Kingdom’s joblessness rate in the fourth quarter of 2023.
GASTAT data showed that non-employment among Saudi nationals stood at 7.7 percent in the fourth quarter of last year, indicating a decrease of 0.3 percentage points compared to the same period in 2022.
However, the participation of locals in the labor force during the last three months of 2023 decreased by 1.2 percentage points year on year, reaching 51.3 percent.
Reducing the number of people without jobs is a crucial objective outlined in Saudi Arabia’s Vision 2030, with goals set for such rate to decrease to 7 percent by the end of the decade, alongside a projected women’s participation rate in the workforce of 30 percent.
In the fourth quarter, the unemployment rate among Saudi females decreased by 2.6 percentage points to 13.7 percent compared to the previous three months.
For Saudi males, this remained unchanged at 4.6 percent in the fourth quarter, while their labor force participation decreased by 0.2 percentage points to 66.6 percent.
Meanwhile, the employment-to-population ratio among women increased by 0.6 percentage points to 30.70 percent during the same period.
The GASTAT survey revealed that a significant 94.9 percent of Saudi nationals without jobs are open to working in the Kingdom’s private sector.
Moreover, 80.1 percent of non-employed Saudi females and 91 percent of males indicated that they would accept work for eight hours or more per day.
The report showed that 62.1 percent of non-employed Saudi females and 43.8 percent of males are willing to commute for a maximum of one hour.
The most commonly used active job search method among Saudis was to seek assistance from friends and relatives, with 85.6 percent of aspirants following this practice.
GASTAT reported that 73 percent of Saudi job seekers applied directly to employers, while 59.4 percent made use of the National Employment Platform, also known as Jadarat.
Oil Updates - prices advance as investors reassess US inventories data
TOKYO: Oil prices edged up on Thursday, following two consecutive sessions of decline, as investors reassessed the latest data on US crude oil and gasoline inventories and returned to buying mode, according to Reuters.
Brent crude futures for May were up 31 cents, or 0.4 percent, at $86.40 a barrel while the more actively traded June contract rose 32 cents, or 0.4 percent, to $85.73 at 7:15 a.m. Saudi time. The May contract expires on Thursday.
US West Texas Intermediate crude futures for May delivery were up 39 cents, or 0.50 percent, to $81.74 a barrel.
Both benchmarks were on track to finish higher for a third consecutive month, and were up about 4.5 percent from last month.
In the prior session, oil prices were pressured following last week’s unexpected rise in US crude oil and gasoline inventories, driven by a rise in crude imports and sluggish gasoline demand, according to Energy Information Administration data.
However, the crude stock increase was smaller than the build projected by the American Petroleum Institute.
“We ... expect US inventories to rise less than normal in reflection of a global oil market in a slight deficit,” Bjarne Schieldrop, chief commodities analyst at SEB Research, said in a note, adding: “This will likely hand support to the Brent crude oil price going forward.”
Also providing support to prices were US refinery utilization rates, which rose 0.9 percentage points last week.
Recent disappointing inflation data affirms the case for the US Federal Reserve to hold off on cutting its short-term interest rate target, a Fed governor said on Wednesday, but he did not rule out trimming rates later in the year.
“The market is converging on a June start to cuts for both the Fed and the European Central Bank,” JPMorgan analysts said in a note. Lower interest rates support oil demand.
Investors will watch for cues from a meeting next week of the Joint Monitoring Ministerial Committee of producer group the Organization of Petroleum Exporting Countries amid supply concerns over geopolitical risks.
OPEC and its allies, known as OPEC+, are is unlikely to make any oil output policy changes until a full ministerial gathering in June, but any sign of members not sticking to current production quotas will be viewed as bearish, analysts at ANZ Research said.
“The lack of a ceasefire deal between Israel and Hamas continues to keep tension in the Middle East elevated,” ANZ said.
Dubai sees 550% annual rise in global SMEs attracted to the emirate
RIYADH: Asian and Australian businesses helped fuel a 550 percent annual rise in small and medium enterprises setting up in Dubai in 2023, according to a report.
The emirate’s international chamber has revealed 104 SMEs were attracted to Dubai in the 12 months to the end of December, a development that underlines its ambitions to double the size of the emirate’s economy and consolidate its position among the top three global cities.
According to a statement, 32 percent of the firms shifting to the emirate were from the Middle East and Eurasia, followed by Asian and Australian SMEs at 29 percent.
Latin America and Europe accounted for 26 percent of companies, while 13 percent attracted were from Africa.
The top sector for these SMEs was trade and logistics at 17 percent, followed by IT at 13 percent, and food and agricultural firms third with 10 percent.
Mohammad Ali Rashed Lootah, president and CEO of Dubai Chambers, attributed the rise to the emirate’s business-friendly environment, the ongoing development of services together with favorable legislation, and the diverse range of investment opportunities available.
He added: “Our network of international representative offices in key global markets has effectively promoted Dubai’s business community and highlighted the emirate’s value for companies seeking global expansion.
“We remain dedicated to contributing to the objectives of the Dubai Economic Agenda, with a primary focus on attracting foreign direct investments in both traditional and emerging sectors.”
The growth in SMEs from across the globe moving to Dubai sits alongside a goal from the emirate’s leadership to see home-grown small businesses expand overseas.
The total number of representative offices across the world operated by the Dubai International Chamber increased by 16 in 2023 and now stands at 31.
This expansion received additional fuel in January when Dubai’s Crown Prince Sheikh Hamdan bin Mohammed announced a 500 million dirham ($136.16 million) plan to help SMEs tap into global markets.
The initiative was launched in conjunction with Emirates NBD, Dubai’s biggest lender by market value, and will see the bank provide financing to companies at competitive rates.
According to a release at the time, the SME sector accounts for 60 percent of the workforce in the emirate.
Saudi Mobily fastest growing firm in Middle East telecom sector in 2024: Brand Finance
RIYADH: Saudi Mobily has been ranked as the fastest-growing firm in the telecommunication sector in the Middle East in 2024 by marketing consultancy Brand Finance.
The list revealed that the value of the company has risen by about 18 percent compared to the previous year, thereby maintaining its leading position among the largest companies in the sector in the Middle East.
The newly released rankings and figures align with Saudi Arabia’s goal to further develop and promote digital transformation in the Kingdom and upgrade the services provided in the information and communication technology field.
“Mobily has become the best choice for both individual and corporate customers, as its achievements at the brand level reflect its outstanding performance in providing integrated and pioneering digital services in the Kingdom and its achievement of great progress in digital infrastructure development,” Senior Vice President of Brand and Corporate Communications at Mobily Noura Al-Shiha said.
Brand Finance also placed the firm’s CEO, Salman bin Abdulaziz Al-Badran, among the top 10 business chiefs in the global brand protection index.
This was mainly attributed to the various initiatives he launched since joining the company, also referred to as Etihad Etisalat Co., in 2019, and his pivotal role in enhancing the growth of the firm’s brand.
Al-Shiha said that Mobily’s CEO’s inclusion in the global brand protection index reflects his interest in making the company one of the strongest business names in the world.
Brand Finance evaluates labels based on several main criteria, including the Brand Strength Index, the companies’s impact on boosting revenue and profit, and future growth expectations.
The majority of Mobily’s investments focus on developing infrastructure and adopting new technologies such as cloud computing and the Internet of Things, increasing data centers, and expanding the scope of 5G network deployment.
Seeking to provide a modern experience to its customers, the company is keen to make them the focus of its attention by adopting the “Customer First” approach. This strategy aims to achieve the goals of Saudi Vision 2030, which strives to improve the quality of life for families and individuals in the Kingdom.
Closing Bell: Saudi main index closes in green at 12,607
RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Wednesday, gaining 22.44 points, or 0.18 percent, to close at 12,607.98.
The total trading turnover of the benchmark index was SR7.35 billion ($1.96 billion) as 155 stocks advanced, while 62 retreated.
Similarly, the MSCI Tadawul Index increased by 1.57 points, or 0.10 percent, to close at 1,591.48.
Furthermore, the Kingdom’s parallel market, Nomu surged, gaining 350.14 points, or 1.31 percent, to close at 27,008.60. This movement occurred as 43 stocks advanced, while 19 retreated.
The best-performing stock of the day was Modern Mills for Food Products Co. Its share price surged by 30 percent to SR62.4 during its first trading session on the main Saudi stock market.
Other top performers included Saudi Advanced Industries Co. and Saudi Cable Co., with their share prices soaring by 9.92 percent and 9.9 percent, reaching SR41.55 and SR101, respectively.
Sustained Infrastructure Holding Co. and Red Sea International Co. also performed well.
The worst performer was Alkhaleej Training and Education Co., with its share price dropping by 9.90 percent to SR31.85.
On the announcements front, Saudi Arabia’s Modern Mills for Food Products Co. made its debut on the main market.
Furthermore, Taiba Investments Co. disclosed its annual financial results for the period ending Dec. 31, 2023. Its revenues amounted to SR536.4 million, up from SR330.2 million in 2022. This increase was attributed to the acquisition of Dur Hospitality Co., which contributed additional revenues from operating activities, along with an uptick in revenues from real estate leasing activity.
Moreover, the company’s net profit reached SR109.8 million in 2023, down from SR139.57 million in the corresponding period in 2022. This decline is attributed to the costs related to the acquisition incurred by the firm and an increase in provisions for certain legal cases.
BinDawood Holding Co. also disclosed its financial results for 2023, reporting revenues of SR5.6 billion compared to SR4.8 billion in 2022. This increase is attributed to the performances from both BinDawood and Danube stores.
The company’s net profit surged in 2023, reaching SR275 million, up from SR124.7 million in 2022.
“This increase in net profit margin is largely attributable to the cumulative impact of an increase in revenue and gross margin and is without the impact of any rent relief, which amounted to SR57.2 million in 2022,” the company stated in a Tadawul statement.
Meanwhile, MBC Group Co.’s revenues amounted to SR1.7 million in 2023, with a net profit of SR17,555.
However, the group lacks comparative figures as the current reporting period spans from its incorporation date on April 20, 2023, until the period’s end on Dec. 31, 2023.