190127 emirates nbd
The Emirates NBD head office in Dubai. Image Credit: Gulf News Archives

Dubai: Emirates NBD reported a group net profit of Dh7.48 billion for the first six months of 2019, up 49 per cent year-on-year. The results announced on Wednesday include a gain of Dh2.1 billion on disposal of a stake in Network International. Core operating profit grew 8 per cent year-on-year, supported by strong asset growth and a higher fee income.

“The bank’s balance-sheet remains strong with further improvements in liquidity and the common equity Tier 1 ratio and stable credit quality,” said Shayne Nelson, Group CEO, Total income for the first-half year was Dh9.52 billion; an increase of 13 per cent, compared with Dh8.45 billion in 2018.

“The operating performance for the first-half was pleasing as all business units delivered income growth. Net interest income grew by 10 per cent in the first-half compared to the previous year, helped by 13 per cent asset growth. Fee income advanced 20 per cent due to strong growth in foreign exchange and investment banking income,” said Surya Subramanian, Group Chief Financial Officer.

Gains made on fee income

Core fee income increased 13 per cent on the back of higher foreign exchange income coupled with increased investment banking activity. Total non-interest income advanced 20 per cent on higher core fee income and lower impairments on investment securities.

Costs for the first-half of 2019 amounted to Dh2.82 billion, an increase of 7 per cent due to a rise in staff costs relating to international expansion, digital and technology. The cost-to-income ratio at 29.7 per cent remains within guidance of 33 per cent and gives headroom to invest selectively to support growth.

During the first-half of 2019, the impaired loan ratio remained unchanged at 5.9 per cent. The impairment charge of Dh1.22 billion is 62 per cent higher than in the first-half of last year.

Loans and deposits increased by 3 and 5 per cent respectively since the beginning of the year. The advances-to-deposits ratio remains comfortably within management’s target range at 92.1 per cent. The bank raised Dh9.7 billion of term debt issued in seven currencies with maturities out to 20 years, more than fully covering 2019 total maturities.

As at June 30, the common equity Tier 1 ratio is 17.4 per cent, Tier 1 ratio is 20.4 per cent, and capital adequacy ratio is 21.5 per cent.

“The group continues to make progress on international growth. Emirates NBD is honoured to have been given permission to open 20 more branches in Saudi Arabia. The bank has opened additional branches in Egypt and all regulatory approvals for the group’s acquisition in Turkey have been granted,” said Hesham Abdullah Al Qassim, Vice-Chairman and Managing Director.