Emirates Islamic reports a net loss of Dh482 million
Profits declined due to lower rates, a decline in non-funded income and higher impairments
Dubai: Emirates Islamic, the Islamic financial institution belonging to the Emirates NBD Group on Wednesday reported a net loss of Dh482 million.
“As a result of the low profit rate environment coupled with a more challenging business environment due to the Covid- 19 pandemic, Emirates Islamic reported a net loss of Dh 482 million for 2020. The bank’s balance sheet remains strong with total assets growing by 9 per cent during 2020 to reach Dh70.6 billion,” said Hesham Abdulla Al Qassim, Chairman of Emirates Islamic, Vice Chairman and Managing Director of Emirates NBD.
Total income of Dh2.1 billion was lower by 22 per cent year-on-year. Funded income margins were lower by 52 bps year-over-year due to lower profit rate environment.
Bank’s net profits (net loss) were lower by 145 per cent year-on-year impacted by the lower rates, a decline in non-funded income due to the slowdown in the economy and an increase in impairment allowances.
Balance sheet
Total assets at Dh70.6 billion, increased by 9 per cent from end 2019. Financing and investing receivables at Dh40.8 billion, increased by 9 per cent from end 2019.
Customer accounts at Dh46.9 billion, increased by 3 per cent from end 2019. Current and saving accounts balances represent 69 per cent of total customer deposits.
Capital and liquidity
Headline financing to deposits ratio stood at 87 per cent, demonstrating a healthy liquidity position. Tier 1 capital ratio at 18 per cent and capital adequacy ratio at 19.2 per cent. Impaired financing ratio is at 9 per cent with a strong coverage ratio of 106.9 per cent.
“Despite these challenges the bank’s balance sheet remains healthy and growth oriented with the headline financing to deposits ratio at 87 per cent. With an increase in business activity in the last quarter of 2020, we have accelerated our sales momentum across our retail, and wholesale segments,” said Salah Mohammed Amin, Chief Executive Officer of Emirates Islamic.