Dubai: Emirates NBD on Thursday reported a net profit of Dh2.35 billion in the first half of 2014, up 30 per cent compared to the same period last year.
The bank posted second quarter net profit of Dh1.3 billion, up 35 per cent compared to the same period last year.
The strong operating performance for the first half of 2014 was helped by solid revenue growth in both retail banking and wealth management, and Islamic banking subsidiary — Emirates Islamic.
Total income for the first half of 2014 grew by 27 per cent to Dh7.04 billion whilst pre-impairment operating profit for the period improved by 35 per cent to Dh4.91 billion.
Total assets grew by 2 per cent to Dh348.3 billion in the first half of 2014. While customer loans increased by 1 per cent to Dh241.8 billion customer deposits increased by 6 per cent to Dh252.9 billion over the same period.
The bank’s advances to deposits ratio improved to 95.6 per cent from 99.5 per cent at the end of 2013.
Non-performing loans (NPL) ratio improved further to 13.5 per cent. The impairment charge for first half of 2014 increased to Dh2.61 billion, compared with Dh1.88 billion in the previous year with the coverage ratio improving to 64.7 per cent from 52.7 per cent in the first half of 2013.
“The healthy set of results in the first half is driven by strong growth in both net interest income and non-interest income coupled with a firm control on expenses,” said Shayne Nelson, Group Chief Executive Officer, Emirates NBD.
Analysts said ENBD’s result was above their estimates.
“The top-line was in line with our estimates. Overall we believe that the bank posted an amazing set of results and is very likely to prompt us to revise our full year estimates on the bank upwards again,” said Naveed Ahmad, Senior Manager, Research Group, Global Investment House.
The bank’s retail banking and wealth management division recorded a robust performance during the first half, with income growth of 15 per cent for the half year ended 30 June 2014 reaching Dh 2.79 billion compared to Dh2.5 billion the same period in 2013. Net interest income increased in the first half of the year by 12 per cent while fee income grew by a strong 22 per cent. The division’s sustained focus on liabilities growth and, in particular, current and savings accounts resulted in faster than market growth of 7.3 per cent in customer deposits to reach Dh108.6 billion.
“Despite a competitive environment we have been able to maintain margins helped by growth in higher margin retail and Islamic products, a more efficient funding base and a contribution from our Egyptian business. Costs remain firmly under control with a cost-to-income ratio of 30.3 per cent for the first 6 months on 2014, 4.2 per cent lower than the comparable period in 2013,” said Surya Subramanian, Group Chief Financial Officer, Emirates NBD.
