Emirates NBD (ENBD), Dubai’s largest lender, posted a net profit of Dh5 billion ($1.36 billion) for the first nine months of the year compared to Dh3.9 billion during the same period of 2014, marking an increase of 27 per cent.

The strong operating performance was helped by an increase in net interest income, a modest increase in costs and a lower impairment charge.

Total Income for the first nine months grew by 2 per cent to Dh11.2 billion. Net interest income grew 8 per cent to Dh7.6 billion due to growth in Retail assets and a lower cost of funds. Non-interest income declined by 7 per cent to Dh3.6 billion due to lower gains from the sale of properties and investments. However, core fee income improved 14 per cent y-o-y driven by growth in foreign exchange and derivative income, growing credit card volumes and higher asset management fees.

The bank’s balance sheet remains strong thanks to further improvements in credit quality, robust capital ratios and strong liquidity particularly during a challenging quarter for regional liquidity in the banking sector.

 The Advances to Deposits ratio remained within management’s target range of 90-100 per cent thanks to further growth in stable funding sources such as Current Account and Savings Account deposits.

The bank issued Dh9.5 billion of term debt with most of this issued in the first half of 2015 when market conditions were receptive. The Impaired Loan ratio improved to 7.1 per cent and the cost of risk declined for the fifth consecutive quarter whilst the Impaired Loan Coverage ratio increased to 115.3 per cent.

Hesham Abdulla Al Qassim, vice chairman, Emirates NBD said: “I am very pleased that Emirates NBD continues to deliver improved profitability whilst the strength of the brand and balance sheet has allowed the Bank to deal with increased regional challenges. In the first nine months of 2015 Emirates NBD achieved a 27 per cent growth in net profit to Dh5 billion. We delivered another milestone with the integration of the Egypt business onto Emirates NBD’s systems platform. The Group is well positioned to continue to utilise our strong franchise and balance sheet to deal with challenges and take advantage of opportunities within the region.”

Shayne Nelson, Group chief executive officer, said: “I am delighted that we have delivered another solid set of financial results, with healthy levels of growth in both net interest income and profit.”

“Our prudent balance sheet and strong ability to attract and retain both retail and corporate deposits has helped offer protection against increased challenges that the region has experienced. Equally pleasing is the further improvement in asset quality and the ability to maintain liquidity ratios within our target management range.

“Our strong balance sheet will allow us to take advantage of any growth opportunities in our preferred markets. We are confident that, going forward, our prudent business model shall continue to deliver a solid performance and deal with the opportunities and challenges that will present themselves,” he added.

Surya Subramanian, Group chief financial officer, said: “The operating performance for the first nine months of 2015 is solid, as demonstrated by the growth in both the net interest income and profit. We took advantage of favourable market conditions to prudently raise Dh9.5 billion of term-funding in the first nine months of 2015.”

“This decision to ‘front load’ our term-funding requirements in the early part of 2015 is paying dividend even as we can comfortably meet maturing liabilities and wait for more favourable conditions to re-enter the capital markets,” he added. – TradeArabia News Service