The Emirates NBD Head Office on Baniyas street in Dubai Image Credit: Ahmed Ramzan/ Gulf News Archives

Dubai: Emirates NBD on Monday reported a nine-month net profit of Dh12.5 billion, up 63 per cent year on year.

The results include a Dh4.4 billion impact from the Network International transaction.

“Emirates NBD delivered a strong set of results in the first nine months of 2019. The Bank successfully completed the acquisition of DenizBank in the third quarter of 2019. This represents a significant milestone for Emirates NBD,” said Hesham Abdulla Al Qassim, Vice Chairman and Managing Director, Emirates NBD.

Following DenizBank acquisition, the bank’s core operating profit grew 5 per cent year on year, supported by a 17 per cent increase in net interest income on loan growth and a 31 per cent increase in non-interest income from higher foreign exchange and credit card income.

Total income for the first nine months of 2019 amounted to Dh15.54 billion; an increase of 20 per cent compared with Dh12.9 billion during the same period in 2018. Net-interest income improved 17 per cent year on year, or 8 per cent excluding DenizBank supported by loan growth.

Total non-interest income advanced 31 per cent year on year, 20 per cent excluding DenizBank on higher core fee and investment securities income. Core fee income increased by 26 per cent due to higher foreign exchange and credit card related income.

Costs for the first nine months of 2019 amounted to Dh4.7 billion, an increase of 14 per cent over the previous year due to a rise in staff and operating costs relating to international expansion.

“The cost to income ratio at 30.3 per cent is within guidance however the Bank remains firmly focused on cost controls as we face pressure on income due to falling interest rates,” said Surya Subramanian, Group Chief Financial Officer.

During the first nine months of 2019 the impaired loan ratio improved by 1.1 per cent to 4.8 per cent as DenizBank’s loans were recorded at fair value on the date of acquisition resulting in no addition to Group NPLs. The impairment charge during this period of Dh2.75 billion is 149 per cent higher than 2018.

Loans and Deposits increased by 31 per cent and 35 per cent respectively since the beginning of the year. In the first nine months of 2019, the Bank raised Dh12.7 billion of term funding through private placements with maturities out to 20 years.

As at 30 September 2019, the Bank’s Common Equity Tier 1 ratio is 13.7 per cent Tier 1 ratio is 15.9 per cent and Capital Adequacy Ratio is 17 per cent.

A rights issue was recently announced which could boost capital ratios by approximately 1.5 per cent. “The successful completion of the rights issue will ensure that the Bank’s capital base provides a strong foundation to embrace controlled growth in the coming years, said Shayne Nelson, Group Chief Executive Officer.