Dubai’s Emirates NBD nine-month profit rose an annual 29% to Dhs7.3bn
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Dubai’s Emirates NBD nine-month profit rose an annual 29% to Dhs7.3bn

Dubai’s Emirates NBD nine-month profit rose an annual 29% to Dhs7.3bn

The bank reported a nine-month total income of Dhs17.3bn as compared to Dhs18.3bn in the previous year

Emirates NBD

Emirates NBD reported a surge in earnings and said impairment charges dropped sharply even as asset quality barely improved.

Dubai’s biggest bank said its nine-month profit rose an annual 29 per cent to Dhs7.3bn, while impairment allowances dropped 42 per cent. The ratio of non-performing loans was at 6.2 per cent as of September 30, unchanged from a year earlier, according to a statement on Wednesday.

Dubai, which kicked off its $7bn Expo this month, has reaped the benefits of a faster reopening after the pandemic paralysed trade and travel. While higher oil prices also mean a boon for the UAE, of which Dubai is a part, S&P Global Ratings has warned that weak tourism will likely long remain a drag on the economy of the Middle East’s commercial hub.

Emirates NBD said it had a record quarter for demand for personal loans and credit cards. Its cost of risk, or a proportion of new loan-loss provisions to total loans, dropped to 106 basis points as of September 30, from 176 basis points a year earlier, reaching a level that’s at “the low-end of the pre-pandemic range,” according to Group Chief Financial Officer Patrick Sullivan.

“The balance sheet remains rock solid with a further improvement in capital, liquidity and credit quality” during the third quarter, Sullivan said in the statement.

The UAE’s central bank has meanwhile begun winding down an economic support program launched in response to the coronavirus, which helped curb risks for lenders. The withdrawal of forbearance measures will likely lay bare the impact of the pandemic on weaker businesses.

The loan deferral component of the stimulus programme will expire by the end of 2021 with financial institutions able to carry on tapping a collateralized Dhs50bn liquidity facility until the middle of 2022.

Emirates NBD also said its international expansion has continued, with additional branches in Saudi Arabia and approval granted to expand the bank’s India retail network. Group Chief Executive Officer Shayne Nelson said 36 per cent of income now comes from international operations.

Emirates NBD nine-month numbers vs year ago:

* Total income Dhs17.3bn vs Dhs18.3bn
* Impairments Dhs3.7bn vs Dhs6.4bn
* Operating profit Dhs7.9bn vs Dhs6.1bn
* 157.2 per cent liquidity coverage ratio and 16.1 per cent common equity Tier-1 ratio
* Total assets stable at Dhs699bn

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