Dubai: Emirates NBD, a leading bank in the region, reported record net profit of Dh8.35 billion in 2017, up 15 per cent year on year, driven by higher income and lower provisions.
Total income for the year ended December 31, 2017 amounted to Dh15.45 billion; an increase of 5 per cent compared with Dh14.74 billion in 2016.
Net interest income grew by 7 per cent in 2017 to Dh10.78 billion due to loan growth and the positive impact of recent interest rate rises. Net interest margins showed a growing trend in 2017 helped by rate rises and an improvement in funding costs.
“2017 marked a successful year for Emirates NBD as we achieved a record annual net profit. We continued to advance Emirates NBD’s digital capabilities and are honored to be named the Official Banking Partner for Expo 2020 Dubai where we will play a key role in ensuring that banking services at Expo 2020 Dubai are at the forefront of innovation,” Shaikh Ahmed Bin Saeed Al Maktoum, Chairman, Emirates NBD said in a statement.
Non-interest income increased 1 per cent during the year as higher foreign exchange and derivative income offset lower income from the sale of properties.
Costs for the full year 2017 amounted to Dh4.84 billion, an improvement of 1 per cent over the previous year, helped by a containment in staff costs following cost control measures implemented in 2016.
The rise in marketing and IT costs relates to our planned investment in digital and technology refresh.
“We are confident that our prudent business model shall continue to deliver a solid performance and deal with the opportunities and challenges that will present themselves,” said Hesham Abdulla Al Qassim, Vice Chairman and Managing Director, Emirates NBD.
During 2017 ENBD’s impaired loan ratio improved by 0.2 per cent to 6.2 per cent. The impairment charge during this period of Dh2.22 million is 15 per cent lower than in 2016 as the net cost of risk improved. This net provision includes Dh1.7 billion of write-backs and recoveries, and together helped boost the coverage ratio to 124.5 per cent.
“Emirates NBD delivered a record performance in 2017, underpinned by higher income, a control on expenses and a lower cost of risk.
Margins widened 22 basis points in 2017, helped by rate rises and improved funding costs.
The Group’s balance sheet continued to strengthen, with further improvements in capital and liquidity and a stable credit quality profile,” said Group Chief Executive Officer, Shayne Nelson.
The bank’s loans and deposits both grew by 5 per cent during 2017.
The advances to deposits ratio remains comfortably within management’s target range at 93.1 per cent and the liquidity coverage ratio is at a healthy 146 per cent.
During 2017, the bank raised Dh10.2 billion of term funding through a mix of public issues and private placements with maturities out to twenty years. Term funding represents 11 per cent of total liabilities.
As the yearend 2017, the bank’s capital adequacy ratio and Tier 1 capital ratio, as calculated under Basel II, strengthened to 21.9 per cent and 19.5 per cent respectively.
Under the Basel III framework, the Bank’s Common Equity Tier 1 ratio is 16.4 per cent, Tier 1 ratio is 19.7 per cent and Total Capital ratio is 22 per cent.
