Emirates NBD reports profit of Dhs5.3bn, its highest since 2019

Dubai’s largest lender Emirates NBD delivered its highest first-half profit since 2019. The Q2 profit was exceptionally strong at Dhs3.5bn, up 42 per cent year-over-year (YoY).

Another record half-year for retail lending and customer transactions together with improving margins drove income up 23 per cent YoY. Credit quality across the group’s footprint continues to improve with impairment down 28 per cent.

These results build on the economic recovery momentum from 2021. With its strong profitability and balance sheet the group’s short and long-term moody’s ratings have been upgraded.

Emirates NBD’s H1 2022 profit rises 11% to AED 5.3 billion. Read more https://t.co/PjJcvr0D0A pic.twitter.com/tPTo1KZ8ta

— Emirates NBD (@EmiratesNBD_AE) July 28, 2022

Hesham Abdulla Al Qassim, vice chairman and MD said, “ Emirates NBD played a leading role in both the DEWA and TECOM IPOs, delivering customers a fully digital, straight through the platform from on-boarding to payment. We were delighted that Moody’s upgraded Emirates NBD’s short and long-term ratings, recognising the group’s resilient post-pandemic financial fundamentals and increased diversification.”

He also added how Emirates NBD has doubled its commitment to developing Emirati talent. “In addition to enhancing the Bank’s mainstream graduate program, which attracts over 100 graduates per year, we  launched the ‘National Digital Talent Program’ giving a UAE talent pool practical knowledge in Digital, IT and Artificial Intelligence, supporting the UAE Government’s National Strategy for Artificial Intelligence 2031.”

Shayne Nelson, Group CEO said, “Emirates NBD delivered strong results with total income rising 23 per cent to Dhs14.2bn on improved loan and deposit mix, with higher interest rates feeding through to margins. International operations contributed 41 per cent of total income in H1 2022. New lending increased substantially with a record half-year for retail lending and renewed corporate lending demand.”

He also said that 93 per cent of new product or servicing requests are now fully automated, with a 5 per cent improvement on last year eliminating four million manual interventions annually. “These strong results, along with the positive outlook for margins, enable us to accelerate our investment in our international network and digital capabilities, supporting our next stage of growth.”

Patrick Sullivan, Group CFO said, “We have maintained good income growth momentum, kept firm control of costs, and seen a consistent decline in the cost of risk. Net profit of Dhs5.3bn increased by a healthy 11 per cent YoY, comfortably absorbing the impact of inflation in Turkey. The UAE banking sector continues to benefit from ample liquidity, helped by the high oil price. In H1 2022 we grew our current account savings accounts (CASA) balances by Dhs10bn, enabling the Group to benefit from interest rate rises.

Here are the key highlights of the H1 2022 performance: 

Increase in operating performance 

– Total income was up 23 per cent YoY to Dhs14.2bn on improved loan mix and cheaper deposits with higher interest rates feeding through to margins

– Net interest margin guidance was raised by 50bps due to higher interest rates and improving margins in DenizBank

– Expenses were well controlled, with high income enabling the group to accelerate investment in advanced analytics and international network to drive future growth

– Impairment allowances substantially were down 28 per cent YoY, reflecting strong writebacks and recoveries and an improving economic outlook

– Net profit of Dhs5.3bn was up by a healthy 11 per cent YoY

– Earnings per share went up 14 per cent YoY to 80 fils for H1-22, underlying was up 57 per cent YoY.

Empowering its customers 

– Total assets were up 3 per cent at Dhs711bn

– Customer loans rose by a 1 per cent at Dhs425bn, with a record half-year for retail financing and renewed demand for corporate lending

– CASA grew Dhs10bn in H1-22 reflecting strong UAE liquidity, enabling the group to benefit from further interest rates rises

– NPL ratio improved by 0.3 per cent to 6.1 per cent in Q2 2022 on healthy writebacks and recoveries, as the economy continues to strengthen

– Coverage ratio very strong at 133.3 per cent

– 155 per cent liquidity coverage ratio and 150 per cent common equity Tier-1 ratio reflect the group’s solid balance sheet, used to empower customers and create opportunities to prosper

The digital transformation

– Moody’s upgrade Emirates NBD’s short and long-term ratings recognised the group’s resilient post-pandemic financial fundamentals and increased diversification

– Emirates NBD and Emirates Islamic have close to a combined 30 per cent market share of UAE Debit and Credit Card spend

– International revenue diversified income, representing 41 per cent of total revenue

– The bank played a leading role in the DEWA and TECOM IPOs, delivering customers a fully digital platform enabling a seamless, paperless journey from on-boarding and subscription through to payment

– 93 per cent of new product and service requests are now fully automated, with 5 per cent YoY improvement eliminating 4 million manual interventions annually

– The bank supports the ‘Dubai Can sustainability initiative’, and sponsors a public water refill station, which has saved 91,000 single-use plastic bottles since February 2022

– Emirates NBD launched the ‘National Digital Talent Program’ giving a UAE talent pool practical knowledge in Digital, IT and Artificial Intelligence, supporting the UAE Government’s National Strategy for Artificial Intelligence 2031