Emirates NBD, a leading bank in the region, has posted a rise in net profit of 15 per cent year-on-year (y-o-y) and 15 per cent quarter-on-quarter (q-o-q) to Dh2.7 billion ($735 million) during the first quarter of the year, driven by an increase in total income, loan growth and stable margins.

Core fee income increased 15 per cent y-o-y and 9 per cent q-o-q on the back of higher income from forex and derivatives. The Bank’s balance sheet continues to strengthen with further improvements in capital & liquidity and stable credit quality.

Total income of Dh4.7 billion improved 15 per cent y-o-y due to loan growth, an improvement in margins and higher fee income, while net interest margin improved15 bps y-o-y to 2.83 per cent, helped by rate rises.

Hesham Abdulla Al Qassim, vice chairman and managing director, Emirates NBD said: “I am delighted that Emirates NBD has delivered another strong net profit this quarter. I am also pleased that Emirates NBD was named the UAE’s most valuable banking brand in The Banker’s annual brand valuation league table. Our brand value reflects our solid financial performance as well as our ongoing initiatives in customer service, product development and corporate social responsibility.

“In keeping with the ‘Year of Tolerance’ initiative, launched by His Highness Sheikh Khalifa bin Zayed Al Nahyan, Emirates NBD will continue to engage its customers and the community with innovative campaigns, programmes and initiatives that celebrate the nation’s unity and commitment to diversity.”

Shayne Nelson, Group chief executive officer said:“Emirates NBD delivered a strong set of results with net profit advancing by 15 per cent to reach Dh2.7 billion in the first quarter, underpinned by higher income on the back of loan growth, stable margins, and increased foreign exchange and derivative income.”

“The Bank’s balance sheet remains strong with an improvement in liquidity and capital ratios and a stable credit quality. The Bank has now converted 40 per cent of its branch network in the UAE into disability-friendly branches. We will continue to introduce specialised banking services and assistive solutions that support financial inclusion.

“As we prepare for Expo 2020 Dubai, Emirates NBD will remain at the forefront of innovation with its efforts to simplify banking and deliver a technology-driven banking experience with a human touch. I am pleased to announce that we have revised, on favourable terms, the Sale and Purchase Agreement relating to the acquisition of Denizbank. We expect this transaction to complete by the end of Q2 2019, subject to obtaining the required regulatory approvals,” he added.

Surya Subramanian, Group chief financial officer said: “The operating performance for the first quarter of 2019 was pleasing as we delivered growth in both net interest income and fee income. Costs improved by 7 per cent from the previous quarter due to a reduction in staff costs, lower professional fees and marketing expenses. NIMs declined by 2bp during the quarter as the effect of higher wholesale funding and fixed deposit costs were largely offset by an improvement in loan yields and higher CASA balances.”

Emirates Islamic (EI)

EI delivered a strong set of results for the first quarter of 2019 with a record high quarterly net profit of Dh411 million, up 97 per cent compared to the same period last year.

EI reported total income of Dh663 million for Q1 2019, a 12 per cent increase compared to the same period last year, supported by balance sheet growth, higher funded income and strong momentum in fee income. An enhanced collections drive coupled with an improved cost of risk during Q1-19 resulted in 117 per cent lower net impairments compared to the same period last year.

EI’s total assets reached Dh60.6 billion at the end of the first quarter of 2019. Financing and Investing Receivables increased by 1 per cent to Dh36.4 billion compared to Dec 2018. Customer deposits also increased by 4 per cent to Dh43.4 billion over the same period. CASA balances represented 67 per cent of total customer accounts. EI’s headline Financing to Deposit ratio stood at 84 per cent and is comfortably within the management’s target range. EI has a strong Capital Adequacy Ratio of 18.5 per cent.

Outlook

Emirates NBD expects economic activity in 2019 to be underpinned by higher oil production as well as increased government spending, following softer than expected growth in 2018.  The UAE economy grew 1.7 per cent last year, according to official statistics.

The bank’s research team has retained its growth forecast of 3.1 per cent for the UAE in 2019, a statement said.

The bank will continue to implement its successful strategy built around five pillars which include delivering excellent customer experience with a digital focus, building a high performance organisation, driving core businesses, running an efficient organisation and driving geographic expansion, it added. – TradeArabia News Service