No conspiracy behind oil price fall: Al-Naimi

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Updated 23 December 2014

No conspiracy behind oil price fall: Al-Naimi

ABU DHABI: Gulf countries on Sunday blamed “irresponsible” non-OPEC producers for a plunge in global crude prices, but voiced confidence that markets would rebound.
World prices have fallen almost 50 percent since June, mainly due to a supply glut, the weak global economy and a strong US dollar.
UAE energy minister Suhail Al-Mazrouei, in a clear reference to shale and sand oil output from North America and other emerging energy markets, attributed the price dive to “newcomers.”
“One of the main causes is irresponsible production by some producers from outside the (OPEC) organization,” he told an energy forum in Abu Dhabi.
The global oil market has become increasingly competitive in recent years with the surge in shale and sand oil production from countries outside the decades-old OPEC alliance.
Saudi Oil Minister Ali Al-Naimi also lashed out at non-OPEC members, claiming the global price fall on a “lack of cooperation by main producing countries outside OPEC, misleading information and speculators’ greed.”
In a further reference to shale oil, Naimi predicted that “high-cost producers will not continue to increase production.”
Last month, OPEC decided to maintain production levels of 30 million barrels per day despite pleas by some members to cut output in a bid to curb sliding prices.
Mazrouei defended the measure, which he said would stabilize oil markets.
“OPEC’s decision, which aims to provide the market with time to rebalance, is correct, strategic and useful to the global economy,” he added.

'No Saudi plot'
Naimi dismissed claims of a Saudi “plot” to push prices down for political goals, insisting that the kingdom’s policy is “based on pure economic principles.”
Unlike rich Gulf members of the cartel, non-Arab OPEC members lack the sovereign wealth funds to smooth over oil price fluctuations and have budgeted for price scenarios now radically out of sync with reality.
Russia and OPEC-member Iran, whose economies rely heavily on oil revenues, have spoken of a market conspiracy to hold prices down after OPEC’s decision to keep output steady.
Analysts have said Saudi Arabia is content to see shale oil producers — and even some OPEC members — suffer from low prices rather than reduce output to boost prices.
Countries such as Nigeria and Venezuela have also been hit hard by the downturn.
“Recently, certain analyses and articles have spoken of a politically motivated Saudi plot, using oil and its prices against this country or that... This is baseless,” Naimi said.
“I am confident that oil markets will recover... and that oil prices will improve,” he added.
Qatar’s energy minister, Mohammed Al-Sada, also sounded upbeat, arguing that tumbling oil prices represented a “temporary correction.”
He warned however that prices at their current level could “weaken investment” in production capacity needed to meet future demand.
“The growing demand for energy necessitates huge investments,” he said.
Although prices rebounded sharply on Friday from four-year lows — with the benchmark price just over $60 a barrel — analysts say Gulf countries are bracing for a sharp decline in oil revenue.
Pumping about 17.5 million barrels per day, the countries are forecast to lose at least half their income from oil, or around $350 billion a year, at current price levels.

Emirates NBD profit surges on asset sale and forex gains

Updated 17 July 2019

Emirates NBD profit surges on asset sale and forex gains

  • Dubai’s largest bank reports 80 percent rise in net profit for second quarter

DUBAI: Emirates NBD, Dubai’s largest bank, reported an 80 percent rise in second-quarter net profit helped by the sale of a stake in Network International and strong non-interest income on foreign exchange gains.

The result included a gain of 2.1 billion dirhams ($572 million) from the sale of a stake in digital payment provider Network International in an initial public offering in London in April.

The earnings showed that top banks in the UAE have still withstood strains from a sluggish economy and a property downturn in Dubai.

Second-quarter net profit jumped 80 percent to 4.74 billion dirhams. EFG Hermes had expected a net profit of 4.06 billion in the second quarter.

The bank said net interest income rose 6 percent in the second-quarter from a year earlier, as growth in assets offset a drop in net interest rate margins.

Non-interest income surged 23 percent, helped by gains in foreign exchange income and investment banking activities.

Provisioning for bad debts more than doubled to 656 million dirhams in the second quarter from a year earlier.

The bank said the cost of risk had increased in 2019 to a more normalized level from relatively better credit quality conditions in 2018.

Cost of risk reflects the price a lender pays to manage its risk exposure. In 2018, Emirates NBD signaled that it expected cost of risk to revert to a long-term level of 80-100 basis points from the 63 basis points seen in 2018.

“The increased cost of risk of 82 basis points in H1 2019 is a result of an expectation of a reversion of credit quality to more normalized levels from the benign conditions in 2018, coupled with the expectation of lower write-backs and recoveries,” it said.

Credit-rating agency Moody’s had warned earlier this year provisioning charges for top banks in the UAE will increase in 2019 owing to pressure in the property and the retail sectors.

The Dubai lender said its net profit surged 49 percent in the first half of the year. “Core operating profit advanced 8 percent compared to the first half of 2018, helped by loan growth, higher foreign exchange income and increased investment banking activity,” the bank’s chief executive Shayne Nelson said in a statement.

Nelson said that the bank continued to make progress on the acquisition of Turkey’s Denizbank and expects this transaction to close in the third quarter of 2019.

Emirates NBD said in April that it was buying Denizbank from Russia’s Sberbank at a roughly 20 percent discount to a previously agreed price, after a steep fall in the Turkish lira.