Profit dip has weighed heavily on Emirates Islamic's results. Image Credit: Gulf News Archive

Dubai: Emirates Islamic, part of Emirates NBD Group, reported net profits of Dh12 million for the first-half of 2020, attributing the decline to higher impairments on its financing and investment book to cater to the future impact of COVID-19.

“Our financial results for the first-half of 2020 reflect our measured and cautious approach as the UAE eases lockdown restrictions and begins a phased plan towards economic recovery," said Salah Mohammed Amin, CEO. "Our strong balance-sheet and healthy market share enable the bank to continue to support our loyal customer base so that we all can emerge even stronger from these unprecedented times.” 

In the first-half, the bank’s total income was lower by 15 per cent year-on year at Dh1.1 billion. Funded income margins were lower by 25 basis points due to lower profit rate environment.

Asset dip

While total assets decreased 1 per cent to Dh64.2 billion from year end 2019, financing and investing receivables at Dh40.4 billion, increased by 8 per cent from year-end 2019. Customer accounts at Dh45 billion remained broadly flat from end-2019 as current and savings accounts balances surged 10 per cent in the same period.

Impaired financing ratio was at 8.2 per cent, with a strong coverage ratio of 103.2 per cent. The bank reported a "healthy liquidity position" with headline financing-to-deposit ratio at 90 per cent. Capital position reamained strong with a Tier-1 capital ratio of 18.9 per cent and capital adequacy at 20 per cent.

“While COVID-19 has had an impact on our business, we remain resilient and confident as the UAE economy responds to a phased re-opening,” said Hesham Abdulla Al Qassim, Chairman of Emirates Islamic, Vice-Chairman and Managing Director of Emirates NBD.

“We were among the first Islamic banks to offer relief measures to our customers facing financial difficulties as a result of COVID-19. In 2020, we assisted over 35,400 customers to the tune of Dh2.09 billion in instalment deferments.”