Emirates NBD reports Dh1.87 billion in net profits for Q1 2017

Total income for the quarter amounted to Dh3.6 billion

DUBAI 21 April 2017: Emirates NBD reported Dh1.87 billion net profits for the first quarter of 2017 up 4 per cent year on year. The operating performance was helped by a control on expenses and lower provisions.

“Emirates NBD made an encouraging start to the year with a 4 percent growth in net profit and further strengthened its balance sheet, with improvements in credit quality and liquidity, coupled with strong capital ratios,” said Hesham Abdulla Al Qassim, Vice-Chairman and Managing Director of Emirates NBD.

Total income for the quarter amounted to Dh3.6 billion; an increase of 4  compared with the preceding quarter. Net interest income improved 1 percent over the preceding quarter due to loan growth coupled with an improvement in margins.

During the quarter, the impaired loan ratio improved by 0.1 per cent to 6.3 per cent. The impairment charge in the first quarter of Dh639 million is 23 per cent lower than in the same quarter last year as the net cost of risk improved. This net provision includes Dh364 million of write-backs and recoveries, and together helped boost the coverage ratio to 122.5 per cent.

“Emirates NBD delivered a solid set of results in the first quarter of 2017, underpinned by a control on expenses and an improved cost of risk. The Group’s liquidity position remained strong and we are focussed on improving margins by enhancing our funding base,” said Group Chief Executive Officer, Shayne Nelson.

Loans increased by 2 per cent and deposits grew by 3 percent during the quarter.

The advances to deposits ratio remains comfortably within management’s target range at 92.5 per cent. In the first quarter the bank raised Dh3.3 billion of term funding through private placements and term funding represents 10 per cent of total liabilities.

Core gross fee income increased 7 per cent year on year on the back of higher income from forex and rates. Net interest margin improved during the quarter as rate rises flowed into loan yields and funding pressures receded.

“The operating performance for the first quarter of 2017 was pleasing as we saw margins improve compared to the fourth quarter of 2016. This margin increase is due to an improvement in funding costs coupled with loan pricing benefiting from rising interest rates,” said Group Chief Financial Officer, Surya Subramanian.

By Rajive Singh