Emirates NBD
During first quarter 2024, Emirates NBD scored on two key financials - with recoveries on impaired loans and growth in retail lending. Image Credit: WAM

Dubai: The UAE mega-bank Emirates NBD ticked off another record, with net profit surging to Dh6.7 billion for the first three months of 2024. That's from a 12 per cent spike from a year ago - and a whopping 67 per cent increase over the Q4-23 tally.

Apart from its home base, Emirates NBD continues to gain from 'regional growth, increased transaction volumes, a low-cost funding base'.

Plus, the Dubai bank has reported significant recoveries on its impaired loans.

The Group’s asset base shot past Dh900 billion as 'retail lending (totaling Dh9 billion) had its strongest ever quarter'. Corporate lending (which came to Dh24 billion) also closed 'landmark deals' across the region, as the branch presence in Saudi Arabia more than doubled to 18 by end 2023. "We refreshed our Egyptian franchise, as our enhanced international footprint and digital capabilities drove further growth," the statement said.

In Saudi Arabia, "We have been present in the Kingdom for 20 years and the branch network has doubled, driving 19 per cent loan growth in the first quarter of 2024," said Shayne Nelson, Group CEO. (In Turkey, Emirates NBD owned DenizBank helped deliver a Dh500 million profit as the balance-sheet grew to Dh150 billion.)

Gains on all fronts

At the top-line, the Dubai bank recorded Dh10.7 billion, up 3 per cent quarter-on-quarter and resulting from an 'excellent deposit mix, solid loan growth and strong fee and commission growth across all business segment'.  Expenses were brought down during the period, by 8 per cent.

Sustained resilience
Emirates NBD projects UAE and Saudi 'non-oil growth to remain relatively robust this year, underpinned by continued investment and consumption. We have not seen an adverse impact on the operating environment from geopolitical developments in the region, but remain mindful of the potential risks'.

Deposit tally

The deposit base grew Dh26 billion in the first quarter, with 'customer campaigns, digital banking and promotions delivering a Dh21 billion increase in low-cost current- and savings accounts'. Credit quality made significant gains, and something that the bank will look to continue with.

"The Group registered an impairment credit on regularisation of payments as clients benefited from a buoyant economy," the statement said. "Retained earnings boosted capital ratios and the rock-solid balance sheet makes Emirates NBD a regional powerhouse, providing the platform for future growth."

According to Patrick Sullivan, Group CFO, "The credit environment remains healthy and clients continue to benefit from a buoyant economy with further regularisation of loan payments, leading to a net impairment credit of Dh0.9 billion. The Group’s low-cost CASA deposit base grew again in the first quarter, enabling us to benefit from higher interest rates."

The Q1-24 results announced by UAE banks to date show similar gains as well as recoveries on loans that had been declared as impaired. With no clarity as yet on when interest rates will drop, the banking sector can hope to ride on the fairly bullish business sentiments coursing through the economy.