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Dubai’s Emirates NBD reports a 52% slide in net profit for 2020

Dubai’s Emirates NBD reports a 52% slide in net profit for 2020

Total income of Dhs23.2bn improved 4 per cent year-on-year

Emirates NBD

Dubai lender Emirates NBD has reported a net profit of Dhs6.96bn for 2020, marking a slide of 52 per cent from Dhs14.5bn recorded in 2019.

The decline was due to higher provisions and no repeat of the gain on disposal of Network International shares in 2019.

Operating profit declined 29 per cent year-on-year mainly due to lower interest rates and transaction volumes, coupled with higher impairment allowances. Meanwhile, total income of Dhs23.2bn improved 4 per cent, year-on-year, on loan growth, including DenizBank. Impairment allowances increased to Dhs7.9bn, reflecting a weaker credit environment impact of Covid-19.

Total assets stood at Dhs698bn at the end of 2020, up 2 per cent from Dhs683bn in 2019. Customer loans at Dhs444bn, went up 1 per cent from Dhs437bn in 2019.

Meanwhile, customer deposits at Dhs464bn, went down 2 per cent from Dhs472bn in 2019. The non-performing loan ratio increased 0.6 per cent to 6.2 per cent in 2020, while the coverage ratio remained strong at 117.3 per cent.

Costs for 2020 increased by 9 per cent to Dhs7.8bn due to the full-year inclusion of DenizBank. Excluding it, costs improved 6 per cent year-on-year as a result of management actions during 2020 in response to Covid-19 and lower income.

Sheikh Ahmed Bin Saeed Al Maktoum, chairman, Emirates NBD said: “Emirates NBD delivered a net profit of Dhs7bn in 2020 despite the global pandemic that caused major disruption to individuals, communities and businesses. The Central Bank of the UAE’s Targeted Economic Support Scheme has been instrumental in helping customers and banks through these challenging times. I am proud that Emirates NBD played its part in supporting customers and the economy by providing financial assistance as well as actively participating in community initiatives. In light of the bank’s performance, we are proposing a cash dividend at 40 fils per share.”

“Emirates NBD has further cemented its reputation for innovation in products and service in the fourth quarter with the unveiling of businessONLINE, providing corporate clients with a seamless, secure and agile single-window to support all their banking needs,” noted Hesham Abdulla Al Qassim, vice chairman and managing director, Emirates NBD.

Shayne Nelson, group chief executive officer, meanwhile, said: “Emirates NBD delivered a 1 per cent improvement in pre-impairment operating profit in 2020 despite a challenging operating environment. Net interest income increased by 8 per cent during the year as the contribution from DenizBank more than offset a decline in margins due to lower interest rates. Emirates NBD’s resilient operating performance, coupled with a solid balance sheet will provide a platform for customers to take advantage of growth opportunities in the year ahead. Customer banking preferences changed during 2020 as an increasing number of both retail and corporate customers embraced digital banking.”

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