Dubai’s Emirates NBD reports 18% rise in net profit for Q1 2022

Dubai’s Emirates NBD posted Dhs2.7bn in net profit for Q1 2022, rising 18 per cent year-on-year and 36 per cent quarter-on-quarter.

The growth was attributed to Q1 2022 being a record quarter for retail lending, deposit growth and customer transactions. Total income notched up 3 per cent year-on-year to Dhs6.4bn on improved loan mix and cheaper deposits, Dubai Media Office reported.

Emirates NBD’s AED 2.7 billion profit jumps 18%
A record quarter for retail lending, deposit growth & customer transactions. https://t.co/v6pGnAloRX pic.twitter.com/Qt8AICJbdj

— Emirates NBD (@EmiratesNBD_AE) April 21, 2022

Net interest income was also up 4 per cent year-on-year on improved loan and deposit mix. Meanwhile, non-funded income increased 2 per cent year-on-year from increased local and international card transactions, coupled with growth in FX and derivative income. Impairment allowances in Q1 2022 were down 20 per cent year-on-year.

The bank’s total assets increased a marginal 1 per cent at Dh694bn despite the Turkish Lira depreciation, a statement said. Meanwhile, customer loans also increased 1 per cent at Dhs425bn. NPL ratio increased marginally by 0.02 per cent to 6.4 per cent during the first quarter with coverage ratio strengthening to 128.5 per cent.

As at March 31, 2022, the group’s common equity tier 1 ratio stood at 15 per cent, Tier 1 ratio was 17 per cent and Capital Adequacy ratio totalled 18.1 per cent. The bank also held a 25 per cent market share of UAE debit and credit card spends.

Meanwhile, Emirates Islamic’s net profit increased 62 per cent year-on-year to Dhs342m on higher income and lower impairment allowances, and DenizBank’s net profit stood at Dhs629m.

Hesham Abdulla Al Qassim, vice chairman and managing director said: “Emirates NBD’s profits jumped 18 per cent y-o-y to Dhs2.7bn, reflecting the strengthening regional economy and the success of the group’s diversified business model. Emirates NBD is proud of its leading role in the DEWA IPO, delivering customers a fully digital platform from on-boarding and subscription through to payment.”

Shayne Nelson, group chief executive officer said: “Emirates NBD delivered strong results with income growth and lower provisions driving profitability 18 per cent higher year-on-year. We delivered loan growth in the first quarter of 2022 reflecting the more optimistic economic outlook. We have increased margin guidance in light of rising interest rates.

“International operations contributed 37 per cent of total income in Q1-22 and DenizBank’s profitability was stable despite the depreciation in Turkish Lira. These strong results, along with the positive outlook for margins, enable us to invest in our international network and digital capabilities, supporting our next stage of growth.”

Outlook

Emirates NBD Research revised 2022 GDP growth forecasts upwards for the GCC, factoring in expected higher oil and gas production.

Emirates NBD Research expects UAE real GDP to grow by 5.7 per cent in 2022, up from 3.8 per cent in 2021, helped by an increase in oil production. Saudi Arabia’s economy is expected to grow 7.7 per cent in 2022 from 3.2 per cent in 2021 also boosted by higher oil production.