Emirates NBD's profits soared during the third quarter of the year as the bank set aside much smaller sums to pay for bad debts and reduced costs by closing branches and ATMs.
The UAE's biggest bank by assets generated net income of Dh640 million (US$174.2m) in the third quarter, compared with Dh174.6m during the same period the year before. The results were in line with analysts' estimates.
The bank's earnings were boosted by the closure of eight of its branches and 64 ATMs, following a cost-cutting drive this year in which 750 jobs were eliminated.
The bank also tried to lower costs at its subsidiaries, with continuing efforts to merge Emirates Islamic Bank and Dubai Bank resulting in a "staff readjustment", said Rick Pudner, the chief executive of Emirates NBD.
He declined to state how many jobs had been reduced as part of the process, but said that costs generated by Dubai Bank were now a quarter less than they were upon acquisition.
Emirates NBD had been able to "take advantage of gradually improving economic conditions" in the UAE, Mr Pudner said.
"While the outlook continues to be cautious and uncertain, our strong levels of capitalisation and liquidity offer both resilience and flexibility for the future and an ability to take advantage of selected growth opportunities."
Dubai Bank was rescued by the emirate's government in May last year and then sold for Dh10 to Emirates NBD in October, following the Ministry of Finance's clean-up of Dubai Bank's balance sheet.
Emirates NBD has attempted to merge the two, which are both Islamic lenders targeting similar segments of the market.
Branch closures are a rarity in the UAE, which has rapidly developed its financial services sector over the past decade as the number of banks grew to 51.
Despite the branch closures, Emirates NBD retains the biggest distribution network in the UAE, according to data from the Central Bank.
Mr Pudner said that the bank would be left with 104 branches and 566 ATMS.
The bank's results were good enough to meet market expectations and "void of any surprises", said Naveed Ahmed, a financial analyst at Global Investment House, in a research report.
In April, the Central Bank banned lending to governments and related holding companies from exceeding total capital, a limit that took effect on September 30. The deadline passed last month with a number of commercial banks unsure how to apply the new regulations.
Discussion were "still ongoing at the Central Bank," Emirates NBD said.
That is in contrast to rival lender National Bank of Abu Dhabi, which said it had obtained a six-month extension to the Central Bank's lending limits this month.
