DUBAI - Emirates NBD, Dubai's biggest bank by assets, reported a flat fourth-quarter net profit, slightly missing estimates as investments to "drive future growth" offset higher income and lower impairment charges, sending its shares down on Wednesday.

Its net profit of 4 billion dirhams ($1.09 billion) for the October-to-December period was almost unchanged from the same quarter in 2023.

It was only slightly below analysts' average estimate of 4.1 billion dirhams, LSEG data showed, but followed a string of positive quarters and its shares opened 6% down.

They traded down 7.5% at 20.9 dirhams at around 0650 GMT, underperforming a 1% drop in Dubai's main share index and were on track for their worst day in five years.

The bank, majority-owned by Dubai's government, said net profit for the full year increased 7% to 23 billion dirhams "on balance sheet growth".

It proposed a dividend of 100 fils ($0.2723), down from 120 fils announced last year, when the bank had doubled the payout.

Gross loans at the lender increased 10% to 529 billion dirhams in the 12 months to the end of December, while deposits were 14% higher at 667 billion dirhams. Total assets rose 16% to 997 billion dirhams.

Banks in the United Arab Emirates, where Emirates NBD is among the largest, have benefited from the Gulf region's growth prospects as regional governments invest in non-oil sectors to diversify their economies.

Emirates NBD reported a rise of 10% in net interest income to 8.6 billion dirhams in the fourth quarter, while non-funded income grew 8% to 2.7 billion dirhams.

It said its net interest margin was 3.64% in 2024 and it expected the margin to drop to 3.3%-3.5% due to the September interest rate cut by the U.S. Federal Reserve. Most Gulf currencies are pegged to the U.S. dollar and most central banks in the region follow the Fed's moves to keep them stable.

The Fed is expected to keep rates steady in the 4.25%-4.50% range at the end of its meeting later on Wednesday.

($1 = 3.6729 UAE dirham)

(Reporting by Federico Maccioni in Dubai, additional reporting by Amna Mariyam and Mohd Edrees in Bangalore; Editing by Jamie Freed, Savio D'Souza, Sherry Jacob-Phillips and Tomasz Janowski)