Dubai: Emirates NBD Group on Thursday reported a net profit of Dh1.04 billion for the first quarter of 2014, up 25 per cent from Dh836 million in the first quarter of 2013.

Total income for the first quarter of 2014 amounted to Dh3.33 billion; an increase of 27 per cent compared with Dh2.63 billion in the same period last year.

Net interest income for the first quarter of this year improved by 28 per cent to Dh2.23 billion from Dh1.74 billion in the same period last year. The improvement in net interest income is attributed to a combination of year-on-year loan growth, an improvement in the net interest margin helped by a more efficient capital and funding structure, higher growth in consumer lending and the positive impact of declining EIBOR [Emirates interbank offered rate] rates on loan spreads.

Non-interest income for the quarter improved by 25 per cent to Dh1.1 billion from the previous year, driven primarily by an increase in both core banking fee and property related income. “We have delivered a strong set of financial results in comparison with the same quarter in the previous year. This is driven by continued growth in total income which grew 27 per cent year-on-year helped by loan growth and an increase in fee income,” said Shayne Nelson, Group Chief Executive Officer, Emirates NBD.

Customer loans as at 31 March 2014 (including Islamic financing) amounted to Dh239.7 billion, an increase of 1 per cent from the end of 2013. Customer deposits as at 31 March 2014 were Dh251.5 billion, an increase of 5 per cent from 31 December 2013.

The NPL ratio improved to 13.8 per cent at the end of first quarter 2014. The impairment charge for the period under review increased to Dh1.26 billion, compared with Dh888 million in the previous year. The Coverage ratio increased by 3.2 per cent to 60.7 per cent at the end of the first quarter this year against a medium term target of overall impaired loans coverage Ratio of 80 per cent.

Costs for the quarter amounted to Dh1 billion, an increase of 14 per cent over the same period in the previous year and a decline of 14 per cent compared to the previous quarter. The improvement in costs over the previous quarter is due to a decrease in staff related costs and a number of one-off costs. The cost to income ratio improved by 3.7 per cent in the first quarter of this year compared to the same period last year.

“The operating performance for the first quarter of 2014 has strengthened, as demonstrated by the growth in both the total income and pre-provision operating profit. In Q1 2014, pre-impairment operating profit grew by 34 per cent over the comparable period in 2013,” said Surya Subramanian, Group Chief Financial Officer, Emirates NBD.

The bank’s consumer banking and wealth management division recorded a strong performance, with income growth of 13 per cent for the quarter this year reaching Dh1.3 million compared to Dh1.2 billion in the same quarter last year. Growth was driven by an 11 per cent increase in net interest income and a 17 per cent growth in fee income.