Emirates NBD reports nine-month net profit of Dh6.17 billion, up 15 per cent

Dubai: Emirates NBD, delivered a strong set of results with net profit up 15 per cent to Dh6.17 billion for the first nine months of 2017.

For the third quarter the year, the bank reported a net profit of Dh2.27 billion, up 37 per cent compared to the third quarter of 2016.

Net interest income for the first nine months of the year improved 4 per cent year on year due to loan growth and helped by a sustained improvement in margins. The operating performance was also supported by lower expenses and an improved cost of risk.

“Emirates NBD delivered a strong set of results. Margins have continued to improve throughout 2017, helped by rate rises and an improvement in funding costs,” said Group Chief Executive Officer, Shayne Nelson.

Net interest income improved by 4 per cent in the third quarter of 2017 year to date to Dh7.99 billion due to loan growth and a sustained improvement in margins. Net interest margins improved since the beginning of the year as loans reset at higher rates coupled with lower funding costs as liquidity conditions eased.

Non-interest income declined 6 per cent compared to the same period in 2016 due to the lower gains from the sale of investment securities and a downward revaluation of illiquid inventory. However, core fee income grew 3 per cent due to higher income from foreign exchange.

Costs for the nine months ended 30 September 2017 amounted to Dh3.52 billion, an improvement of 5 per cent over the previous year, helped by a containment in staff costs following cost control measures implemented in 2016. Other costs increased due to a mixture of factors, including an increase in marketing spend and higher IT costs as signaled earlier.

During the first nine months of 2017 the impaired loan ratio improved by 0.3 per cent to 6.1 per cent. The impairment charge during this period of Dh1.69 billion is 23 per cent lower than in the corresponding period in 2016. This net provision includes Dh1.05 billion of write-backs and recoveries, and together helped boost the coverage ratio to 124.9 per cent.

 Loans increased by 5 per cent and deposits grew by 4 per cent during the first nine months of 2017. The Advances to deposits ratio remains comfortably within management’s target range at 94.4 per cent and the liquidity coverage ratio is at a healthy 139.1 per cent.

“We achieved a record performance for the first nine months of 2017 as we delivered positive jaws with higher income and lower expenses. With CASA [current and savings account] representing 57 per cent of deposits, our book is positioned to benefit from expected rate rises. Expenses remain firmly under control and provide headroom to invest for future growth and to help deliver our digital aspirations,” said Group Chief Financial Officer, Surya Subramanian

During the first nine months of 2017, the bank raised Dh6.9 billion of term funding through private placements and a ten-year Australian Dollar public deal. Term funding represents 10 per cent of total liabilities. As at 30 September 2017, the Bank’s capital adequacy ratio and Tier 1 capital ratio were 21.2 per cent and 18.8 per cent respectively.

“Our strong financial and operating performance was recognized when Emirates NBD was named 'Banking Company of the Year' by Gulf Business for the second consecutive year. We continue to expand our international presence with our first branch in India which will enable us to better support our customers,” said Hesham Abdulla Al Qassim, Vice Chairman and Managing Director, Emirates NBD.