Net profit up 4% y-o-y and 1% q-o-q to AED 1.87 billion
Emirates NBD (DFM: EmiratesNBD), a leading bank in the region, delivered a solid set of results with net profit up 4% y-o-y and 1% q-o-q to AED 1.87 billion. The operating performance was helped by a control on expenses and lower provisions. Net interest income improved 1% q-o-q due to loan growth coupled with an improvement in margins. Core gross fee income increased 27% q-o-q and 7% y-o-y on the back of higher income from forex and rates. Net interest margin improved during the quarter as rate rises flowed into loan yields and funding pressures receded. The Bank’s balance sheet continues to strengthen with further improvements in credit quality and liquidity, coupled with solid capital ratios.
Financial Highlights – Q1 2017
- Net profit of AED 1.87 billion, up 1% q-o-q and 4% y-o-y
- Total Income of AED 3.6 billion, up 4% q-o-q and declined 7% y-o-y due to lower gains from the sale of investments
- Total assets at AED 452.0 billion, up 1% from end 2016
- Customer loans at AED 295.3 billion, up 2% from end 2016
- Customer deposits at AED 319.2 billion, up 3% from end 2016
- Net Interest Income improved 1% q-o-q on loan growth coupled with an improvement in margins
- Core gross fee income increased 27% q-o-q on the back of higher income from forex and rates
- Cost of risk improved to 80 basis points as an impairment charge of AED 639 million is 23% lower than in Q1-16, helped by AED 364 million of writebacks and recoveries
- Impaired Loan ratio improved to 6.3% whilst the Impaired Loan Coverage ratio strengthened to 122.5%.
- Advances to Deposit ratio at 92.5% remains comfortably within the management’s target range
- Tier 1 Capital Ratio declined to 17.8% as retained profit was more than offset by the payment of the annual dividend
Commenting on the Group’s performance, Mr. Hesham Abdulla Al Qassim, Vice Chairman and Managing Director, Emirates NBD said: “Emirates NBD made an encouraging start to the year with a 4% growth in net profit and further strengthened its balance sheet, with improvements in credit quality and liquidity, coupled with strong capital ratios. We are delighted that our Investment Bank and Asset Management units successfully completed the UAE’s first IPO of 2017 with the launch of ENBD REIT. We are also particularly pleased to be ranked the UAE’s most valuable banking brand, and 75th worldwide, by The Banker. We are honoured to be part of the Year of Giving, an initiative launched by HH Sheikh Khalifa Bin Zayed Al Nahyan, the President of the UAE, to dedicate all activities during 2017 to the brave UAE martyrs; Emirates NBD has embraced the key concept of ‘giving’ as defined by HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President & Prime Minister of the UAE and Ruler of Dubai, by ensuring that all our 2017 CSR activities are designed to make a difference to individuals, society and the nation as a whole.”