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Emirates NBD bank reports 3% growth in net profits to Dh2.6 billion in 2012

The company declared cash dividend of 25 per cent per share

Dubai: Emirates NBD, UAE’s biggest lender by assets, reported a 3 per cent growth in its annual net profits to Dh2.6 billion in 2012, compared to Dh2.5 billion recorded in 2011.

Its total income also rose 3 per cent to Dh10.2 billion while operating profit before impairments rose by 2 per cent to Dh6.5 billion from 2011. Its total assets increased by 8 per cent at Dh308.3 billion at the end of 2012 compared with Dh284.6 billion at the end of 2011, it said in a release on Thursday.

The company declared cash dividend of 25 per cent per share.

“These financial results reflect a very positive operational performance and demonstrate the strength of Emirates NBD and its position as a leading bank in the region,” Shaikh Ahmad Bin Saeed Al Maktoum, Chairman of Emirates NBD, said in a statement.

“Despite the challenges reflected in the broader global economic environment, the UAE and Dubai in particular have shown resilience and solid growth during the year and Emirates NBD is well-placed to continue to capitalise on this improving economic backdrop.”

The bank’s total costs for the year ended 31 December 2012 increased 5 per cent to Dh3.66 billion, resulting from the consolidation of Dubai Bank costs from Q4 2011. 

Excluding the impact of Dubai Bank, operating costs improved by 1 per cent in 2012 due to cost optimisation initiatives. Net interest income for the year declined by 5 per cent to Dh6.91 billion from Dh7.25 billion in 2011. Net impairment loss on financial assets of Dh4.0 billion, improved by 20 per cent compared with 2011.

Customer loans increased by 7 per cent to Dh218.2 billion, compared to Dh203.1 billion at the end of 2011 while customer deposits grew 11 per cent to Dh213.9 billion compared to Dh193.3 billion at the previous year-end.

Headline loan to deposit ratio improved to 102 per cent from 105 per cent at the end of 2011 while the bank’s capital adequacy ratio at extremely healthy level of 20.6 per cent, the bank said.

Non-interest income recorded an improvement of 24 per cent to Dh3.3 billion for 2012, driven principally by higher investment securities income and lower write-downs on investment properties. 

“Excluding these impacts, core fee income improved by 9 per cent resulting from increased banking fee income and a pickup in trade finance activity,” the statement said.

Rick Pudner, Chief Executive Officer of Emirates NBD, said: “During 2012 Emirates NBD has delivered a strong set of financial results with operating profits for the year up 82%. 

“The year has also witnessed successful execution towards our strategic imperatives, with highlights including the completion of the Dubai Bank integration, the progress made in our Wholesale Banking transformation program and the improving growth momentum in our retail and Islamic franchises.  This strategic progress, in combination with our strong levels of capitalisation and liquidity, positions the Bank to take advantage of growth opportunities in the future.”