Monday 6 December 2021

Hesham Abdulla Al Qassim and Shayne Nelson

Emirates NBD Q3 net profit soars 29% to $1.98bn

DUBAI, October 20, 2021

Emirates NBD (ENBD) has reported a net profit of AED7.3 billion ($1.98 billion) for the third quarter (Q3) of the year, marking a yea-on-year increase of 29% and demonstrating financial resilience and the success of its diversified business model.

Interest rates remain at record low levels, yet underlying business momentum is strong with record demand for retail financing, an ENBD statement said.

The Group’s balance sheet strengthened with further improvements in deposit mix, credit quality, capital and liquidity. Emirates NBD continues to support businesses and customers recovering from the global pandemic, while investing in its digital platform and its international network to drive future growth, the statement added.

Key highlights – Q3 2021

Strong operating performance as loan mix improved on strong demand for retail financing, a more efficient funding base and a substantially lower cost of risk

•    Total income up 7% on Q2 2021as margins improved on record demand for retail financing, a more efficient funding base and a higher contribution from DenizBank. Down 5% y-o-y YTD from record low interest rates
•    Expenses declined2% y-o-y YTD with 33.1% cost-to-income ratio within management guidance  
•    Impairment allowances down substantially 42% y-o-y YTD, with106 bps cost of risk at lower end of pre-pandemic range
•    Resulting net profit jumped 29% y-o-y YTD to AED7.3 billion

Strong balance sheet and resilient profitability enable the Group to support customers and empower them to benefit from the continuing economy recovery

•    Total assets: stable at AED699 billion maintaining a strong asset base
•    UAE’s largest lender: Customer loans at AED438 billion with Q3 2021 a record quarter for demand for personal loans and credit cards
•    Deposit mix: highest ever CASA balances, increasing by AED30 billion YTD, positioning the Group very well for eventual rate rises
•    Credit quality: NPL ratio improved by 0.1% to 6.2% with coverage ratio strengthening to126.7% reflecting Group’s prudent approach to earlier credit provisioning
•    Capital and Liquidity:157.2% Liquidity Coverage Ratio and 16.1%Common Equity Tier-1 ratio reflect the Group’s core strengths to support customers and create opportunities to prosper

Hesham Abdulla Al Qassim, Vice Chairman and Managing Director said: “Emirates NBD’s growth in income and profitability in the third quarter of 2021 is a clear sign of improving economic conditions within the region. The UAE economy has fully reopened, thanks to the successful handling of the pandemic by the Country’s wise and visionary Leadership and is well positioned to benefit from the expected growth in international travel.

“As the Official Banking Partner of Expo 2020 Dubai, the Group is excited to showcase our pioneering vision for the future of global banking and spotlight the UAE’s investment potential. Emirates NBD is fully committed and aligned to the ‘Projects of the 50 plan’ to further develop the Emirati talent pool in the national workforce.’’

Shayne Nelson, Group Chief Executive Officer said: “Emirates NBD’s profits jumped 29% to AED7.3 billion for the first nine months of 2021 as the strong economic recovery drove record demand for retail financing. The diversified balance sheet and solid capital base remains a core strength of the Group. We are using this strength to support our customers, empowering them to benefit from the growing economy as Expo 2020 Dubai begins.

“This strength is reflected in Moody’s recent affirmation of Emirates NBD’s ratings and improved ‘Stable’ Outlook, combined with the upgrade in DenizBank’s credit ratings. International expansion continues with additional branches in the Kingdom of Saudi Arabia, approval for further branches in India and strong results in Turkey. The Group continues to diversify with 36% of income now coming from international operations.”

Patrick Sullivan, Group Chief Financial Officer said: “There are many positives in the Group’s strong set of results. Total income rose 7% in the third quarter as margins expanded on an improved loan mix, lower cost of funding and a higher contribution from DenizBank. We continue to maintain a strict control on expenses with the cost to income ratio within guidance.

“The 106 bps cost of risk is at the low-end of the pre-pandemic range despite the Group maintaining the highest coverage level amongst its peers. The balance sheet remains rock solid with a further improvement in capital, liquidity and credit quality during Q3.”


The outlook for the UAE economy is positive, with Expo 2020 Dubai predicted to boost domestic demand and the easing of travel restrictions in key markets expected to support the recovery in tourism and hospitality. Emirates NBD Research expects the non-oil economy to grow by 3.5% this year, and revised their forecast for headline GDP growth up to 1.9% from 1.5% previously on the back of higher oil production.  

The Kingdom of Saudi Arabia’s economy is also expected to benefit from increased oil output in the coming months, and GDP is forecast to grow by 2.5% in 2021.  Higher oil prices will help reduce the budget deficit to just 1.1% of GDP this year, and a number of initiatives have been announced to boost domestic investment.

The Egyptian economy has held up well in the face of the global pandemic, making it one of the few countries in the world to register positive GDP growth in 2020. While GDP growth slowed to 3.3% in the fiscal year ended June 2021, it is expected to accelerate to 5.3% next year.  

Turkey also posted positive GDP growth in 2020, and the market expects growth to accelerate to 8.5% this year.  However, inflation uncertainty may continue to weigh on the Lira. – TradeArabia News Service


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