Emirates NBD hits record Dh10 billion profits in 2018

Dubai - The bank also achieved a milestone of assets reaching half a trillion dirham mark for the first time in its history.

 Emirates NBD, Dubai’s largest bank, on Wednesday said its net profit jumped 20 per cent in 2018 to reach record Dh10-billion mark on the back of higher interest income and reduced provisions.
The bank also achieved a milestone of assets reaching half a trillion dirham mark for the first time in its history.
“2018 marked another successful year for Emirates NBD with strong income growth leading to a record high net profit. As the official banking partner for Expo 2020 Dubai, we are focused on ensuring that banking services at the exhibition are at the forefront of innovation… In light of the solid performance by the Bank, we are proposing a cash dividend at 40 fils per share,” said Sheikh Ahmed Bin Saeed Al Maktoum, Chairman, Emirates NBD.
“We continued to expand the Bank’s international presence in 2018 by growing our branch network in Saudi Arabia and Egypt. We are confident that our prudent business model shall continue to deliver a solid performance and deal with the opportunities and challenges that will present themselves,” said Hesham Abdulla Al Qassim, vice-chairman and managing director, Emirates NBD.
Strong annual profits boosted bank’s shares on Dubai Financial Market by 2.8 per cent to Dh9.25 by noon time.
Shayne Nelson, group CEO, Emirates NBD, said net profit increase was underpinned by higher income and a lower cost of risk.
“Margins widened 35 bps in 2018 as rate rises flowed through to the loan book which more than offset a rise in funding costs. The Group’s balance sheet remains healthy with a further strengthening in capital coupled with strong liquidity and stable credit quality. We made exciting progress in advancing our digital agenda and are pleased to be named The Innovator in the Middle East at the Global Finance 2018 Innovators Awards,” said Nelson.
Total income for 2018 amounted to Dh17.4 billion; an increase of 13 per cent when compared with Dh15.455 billion achieved in 2017. Net interest income grew 19 per cent to Dh12.88 billion in 2018 due to loan growth coupled with an improvement in margins. The net interest margin increased in 2018 helped by rate rises, the bank said.
Its costs also increased 16 per cent year-on-year to Dh5.62 billion due to higher staff, international branch expansion, Value-Added Tax, advertising and Expo 2020 sponsorship.
The net impairment charges fell 22 per cent to Dh1.748 billion, helped by recoveries from legacy loans. This net provision includes Dh1.631 billion of write-backs and recoveries.
The bank said its revised upward UAE’s growth outlook due to increased oil production.
“Oil production in the UAE rose by more than expected in H2 2018, and as a result, we have revised our 2018 estimate for real GDP growth to 2.4 per cent from 2.2 per cent previously. For 2019, we expect economic activity to be underpinned by higher oil production as well as increased government spending. We expect headline GDP growth in the UAE to reach 3.1 per cent in 2019,” it said on Wednesday.
-waheedabbas@khaleejtimes.com