Emirates NBD posts AED5.4bn net profit

DUBAI / EMIRATES BUSINESS

Emirates NBD, the UAE’s largest lender, delivered a solid set of financial results with net profit up 8% to AED 5.4 billion for the first nine months of 2016. The operating performance was helped by higher recoveries and a modest increase in total income, driven by higher core fee income and asset growth which offset a contraction in margins.
Commenting on the Group’s performance, Hesham Abdulla Al Qassim, Vice Chairman and Managing Director, Emirates NBD, said: “Emirates NBD continues to deliver a solid performance, with 8% growth in net profit to AED 5.4 billion for the first nine months of the year. I am particularly pleased that, despite a challenging operating environment, the Group has achieved improved profitability while further enhancing asset quality, liquidity and capital ratios. Emirates NBD is a regional leader in digital banking. We continue to invest in our next generation of online and mobile banking services. We recently launched a pilot blockchain network for international remittances and trade finance, a first for the banking sector in the UAE.”
The bank’s cost of risk continues to normalise as impairment charge of AED 2,184 million is 22% lower than in Q3-15 YTD, helped by over AED 2 billion of writebacks and recoveries. Enhanced asset quality as Impaired Loan ratio improved to 6.4% whilst the Impaired Loan Coverage ratio strengthened to 120.8%. And the Advances to Deposit ratio at 92.8% remains comfortably within the management’s target range. The bank prudently raised over AED 19 billion of term debt at competitive pricing, through private placements, a sukuk issue and a club loan which further boosted structural
liquidity.
Group CEO Shayne Nelson said: “We have delivered another positive set of financial results. Income grew modestly driven by higher core fee income and asset growth which offset a contraction in margins. We continue to drive digital innovation. We are proud to take the lead in piloting the UAE’s first blockchain network for banking services and to open a “Bank of the Future” branch at Jumeirah Emirates Towers. Whilst we have seen increased delinquencies in the micro SME segment, which has prompted Emirates Islamic to take additional provisions, the Group’s overall credit quality continues to improve.”
Group Chief Financial Officer Surya Subramanian said: “The operating performance improved for the first nine months of 2016, thanks largely to lower impairment allowances backed by higher recoveries. The Group’s liquidity position improved further, bolstered by a stable and highly diversified deposit base and our ability to raise over AED 19 billion of term funding in the first nine months
of 2016.”