Emirates NBD profit more than doubles to Dhs6bn in Q1 2023

Emirates NBD reported a record 119 per cent jump in its Q1 2023 net profit to $1.6bn (Dhs6bn), helped by higher interest rates and sound economic conditions. 

This is also a record quarter for income which exceeds Dhs10bn for the first time ever, according to the bank.

The increase in profit reflects higher margins, growing non-funded income and a lower cost of risk on significant recoveries.

Healthy sector liquidity helped Emirates NBD’s deposits grow by Dhs35bn or 7 per cent, including a further Dhs19bn increase in current and savings accounts. This enabled a 3 per cent increase in lending and impressive asset growth.

Credit quality improved due to substantial recoveries reflecting the region’s growing economy with impairment charge down 66 per cent. The bank’s business units also delivered higher income and improved profitability.

Emirates NBD also launched new digital products and services to deliver future growth.

Emirates NBD’s Q1 2023 profit more than doubles to a record AED 6 billion. Quarterly income surpasses AED 10 billion for the first time.https://t.co/MRS2deYC6Q pic.twitter.com/eNjz7YHPj5

— Emirates NBD (@EmiratesNBD_AE) April 27, 2023

Here are the key performance highlights of Emirates NBD in Q1 2023

• 119 per cent profit growth on higher margins, improved deposit and loan mix, and substantial recoveries
• Net profit rose by 119 per cent year-on-year (y-0-y) and 54 per cent quarter-on-quarter (q-o-q)
• Total income up 64 per cent to Dhs10.5bn on the bank’s excellent deposit mix with higher interest rates feeding through to margins and strong growth across all business segments and products
• Net interest margin rose significantly by 145 basis points year-on-year to 4.05 per cent
• Impairment allowances substantially down 66 per cent y-o-year on successful recoveries as coverage ratio increases to 152 per cent
• Credit quality improved with non-performing loan ratio 0.4 per cent lower q-o-q at 5.6 per cent enabling improved credit quality guidance
• Customer loans were up 3 per cent in Q1 with highest ever retail disbursements across conventional and Islamic retail franchise coupled with strong new corporate lending
• Deposits grew 7 per cent or Dhs35bn, including a Dhs19bn increase in current and savings accounts
• Earnings per share up significantly by 117 per cent to 93 fils, underlying up 159 per cent
• Total assets up 5 per cent at Dhs782bn
• 75 per cent of cards issued are now eco-friendly bio-cards, reducing plastic consumption by over 4,200 kilograms

Hesham Abdulla Al Qassim, the bank’s vice chairman and MD said: “Emirates NBD’s profits more than doubles to a record Dhs6bn in the first quarter of 2023, reflecting the success of the group’s diversified business model and a healthy regional economy. Total income grew 64 per cent to Dhs10.5bn on increased transaction volumes and improved margins from an efficient funding base and higher interest rates.

“Q1 2023 is the strongest ever quarter for retail lending with over 144,000 new credit cards issued and over Dhs8bn  of retail loan disbursements. We also upgraded our mobile banking app, revamped the value proposition for affluent clients and enabled instant trading on the Abu Dhabi Stock Exchange to deliver a new standard in customer service.”

Al Qassim added: “Emirates NBD and Emirates Islamic are proud to be the first issuers of dirham bonds and sukuks, following the development of a local yield curve, facilitating capital market access in local currency for UAE corporations.”

Read: Dubai’s Emirates NBD successfully issues three-year Dhs1bn bond