Dubai: Emirates NBD (ENBD) on Tuesday reported a nine-month net profit of Dh5 billion up 27 per cent compared to same period last year.
The strong operating performance was helped by an increase in net interest income, a modest increase in costs and a lower impairment charge.
Total income for the first nine months grew by 2 per cent to Dh11.2 billion. Net interest income grew 8 per cent to Dh7.6 billion due to growth in retail assets and a lower cost of funds.
Non-interest income declined by 7 per cent to Dh3.6 billion due to lower gains from the sale of properties and investments. However, core fee income improved 14 per cent year on year driven by growth in foreign exchange and derivative income, growing credit card volumes and higher asset management fees.
“Our prudent balance sheet and strong ability to attract and retain both retail and corporate deposits has helped offer protection against increased challenges that the region has experienced. Equally pleasing is the furtherimprovement in asset quality and the ability to maintain liquidity ratios within our target management range,” said Group Chief Executive Officer, Shayne Nelson.
For the third quarter ended September 30, 2015, the bank reported a net profit of Dh1.67 billion, up 7 per cent year on year and up 2 per cent compared to the second quarter.
The bank said its balance sheet remains strong thanks to further improvements in credit quality, robust capital ratios and strong liquidity particularly during a challenging quarter for regional liquidity in the banking sector.
The advances to deposits ratio remained within management’s target range of 90-100 per cent thanks to further growth in stable funding sources such as current account and aavings account (CASA) deposits.
The bank issued Dh9.5 billion of term debt with most of this issued in the first half of 2015 when market conditions were receptive. The impaired loan ratio improved to 7.1 per cent and the cost of risk declined for the fifth consecutive quarter whilst the impaired loan coverage ratio increased to 115.3 per cent.
“We took advantage of favourable market conditions to prudently raise Dh9.5 billion of term-funding in the first nine months of 2015. This decision to ‘front load’ our term-funding requirements in the early part of 2015 is paying dividend even as we can comfortably meet maturing liabilities and wait for more favourable conditions to re-enter the capital markets,” said Group Chief Financial Officer, Surya Subramanian.
