Emirates NBD posts Dh3.9 billion profit for first half

Emirates NBD posts Dh3.9 billion profit for first half

Dubai - Emirates NBD delivered a record set of results on Wednesday with net profit up five per cent to Dh3.9 billion


Issac John

Published: Wed 19 Jul 2017, 11:58 AM

Last updated: Wed 19 Jul 2017, 11:56 PM

Emirates NBD posted on Wednesday record half-year net profits of Dh3.9 billion, up five per cent, on higher net interest income, lower expenses and lower provisions.
The Dubai-based lender said interest income improved two per cent year-on-year due to loan growth and helped by a recent improvement in margins.
"Net interest margin improved since the beginning of the year as loans reset at higher rates and funding costs improved as liquidity conditions eased. The operating performance was also supported by a control on expenses and lower provisions," Dubai's largest bank by assets said in a statement.
Total income of the bank declined three per cent to Dh7.5 billion due to lower gains from the sale of investments while total assets rose two per cent to Dh456.2 billion from end 2016.
Customer loans rose five per cent to Dh304.0 billion and customer deposits increased by three per cent to Dh319.9 billion. Impaired loan ratio improved to 6.1 per cent while the impaired loan coverage ratio strengthened to 123.5 per cent. The bank reported liquidity coverage ratio of 157.3 per cent. Tier 1 capital ratio strengthened to 18.3 per cent and capital adequacy ratio advanced to 20.7 per cent with retained earnings.
Hesham Abdulla Al Qassim, vice-chairman and managing director, Emirates NBD, said the lender achieved its highest ever-net profit in the first half of 2017. "Throughout 2017, we aim to embrace and adopt the Year of Giving by ensuring that all activities in our CSR calendar are designed to make a difference to individuals, society and the nation as a whole."
Group chief executive officer Shayne Nelson said despite some uncertain times Emirates NBD has delivered a record set of half-year results. "During 2017 we have seen margins widen 20 bps as recent rate rises flowed through to loan pricing and funding costs improved as regional liquidity conditions eased. The Group's balance sheet continued to strengthen with improved capital and credit quality ratios and liquidity ratios were comfortably maintained within management's target range.
Last year the bank announced a major investment in its digital platform. "We plan to continue our digital transformation program with a planned investment of Dh1 billion over the next three years."
Group chief financial officer, Surya Subramanian said the first half saw margins improve coupled with controlled loan growth. Non-interest income declined year-on-year due to the sale of investment securities in 2016 that were not repeated in the current year. Expenses remain firmly under control and provide headroom to invest for future growth. "We also delivered a further improvement in credit quality with the NPL ratio strengthening to 6.1 per cent and this, coupled with an increase in margins and lower costs, is a position we expect to hold for the remainder of 2017."
Earlier in the year, the bank launched Liv., the UAE's first digital bank targeted at millennials, centered on lifestyle and offering curated deals and experiences for its young customers. The new proposition has been well received with new account opening ramping up rapidly to about 20 per cent of total acquisition for the division.
The bank rolled out a paperless personal loan program across branches and on tablets. It launched, for the first time, Al Etihad Credit Bureau credit score based loan approvals.
Emirates NBD's private banking continued to diversify its client base attracting additional assets under management from both existing and new clients resulting in consistent growth of core revenues.
Wholesale banking delivered a solid set of financial results in the first with operating income of Dh2.417 billion, up by eight per cent compared with the corresponding period in 2016. Net profit of Dh1.684 billion increased by four per cent compared with Dh1.617 billion in first half 2016 due to the growth in operating income, partially off-set by higher credit provisioning. - issacjohn@khaleejtimes.com

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