Emirates NBD releases 1st half 2017 financial results

July 18, 2017
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Emirates NBD releases 1st half 2017 financial results

Emirates NBD, a leading bank in the region, delivered a record set of results with net profit up 5% to AED 3.9 billion. Net interest income improved 2% y-o-y due to loan growth and helped by a recent improvement in margins. Net interest margin improved since the beginning of the year as loans reset at higher rates and funding costs improved as liquidity conditions eased. The operating performance was also supported by a control on expenses and lower provisions.

The Bank’s balance sheet continues to strengthen with further improvements in credit quality and capital, coupled with solid liquidity ratios. Emirates NBD affirmed its credentials as the region’s leader in digital banking with a revamp of its online banking platform including the launch of FaceBanking, a video banking facility that allows eligible customers to talk to an advisor at any time for assistance or sign up for a new loan instantly. The bank also announced a planned investment of AED 1 billion over the next three years to carry out a digital transformation program.

Financial Highlights – H1 2017

Net profit of AED 3.9 billion, up 5% y-o-y from H1-16
Net Interest Income improved 2% y-o-y on loan growth and helped by a recent improvement in margins
Net Interest Margin improved by 20bp from 2.29% in Q4-16 to 2.49% in Q2-17
Total Income of AED 7.5 billion, declined 3% y-o-y due to lower gains from the sale of investments
Total assets at AED 456.2 billion, up 2% from end 2016
Customer loans at AED 304.0 billion, up 5% from end 2016
Customer deposits at AED 319.9 billion, up 3% from end 2016
Impaired Loan ratio improved to 6.1% whilst the Impaired Loan Coverage ratio strengthened to 123.5%.
Liquidity Coverage Ratio of 157.3% and AD ratio of 95% demonstrates healthy liquidity position
Tier 1 Capital Ratio strengthened to 18.3% and Capital Adequacy Ratio advanced to 20.7% with retained earnings

Hesham Abdulla Al Qassim, Vice Chairman and Managing Director, Emirates NBD said:
“It is extremely pleasing to report that Emirates NBD has achieved its highest ever net profit in the first half of 2017. We are honoured to be the Official Banking Partner for Expo 2020 Dubai where we will play a key role in ensuring that banking services at Expo 2020 Dubai are at the forefront of innovation. Our digital banking leadership, along with our solid financial and operating performance, were once again recognized in this year’s Euromoney Awards for Excellence when Emirates NBD was awarded ‘Best Digital Bank in the Middle East’ and ‘Best Bank in the UAE’.

We were pleased to have published Emirates NBD’s first Sustainability Report earlier this year, confirming our commitment to being an ethical and responsible bank. The Bank now has ten disability friendly branches among our network. We are also piloting a digital sign language platform for people with hearing disabilities. Throughout 2017, we aim to embrace and adopt the Year of Giving by ensuring that all activities in our CSR calendar are designed to make a difference to individuals, society and the nation as a whole.”

Commenting on the Group’s performance, Group Chief Executive Officer, Shayne Nelson said:
“Despite some uncertain times Emirates NBD has delivered a record set of half-year results with net profits of AED 3.9 billion, up 5% year on year. During 2017 we have seen margins widen 20 bps as recent rate rises flowed through to loan pricing and funding costs improved as regional liquidity conditions eased. The Group’s balance sheet continued to strengthen with improved capital and credit quality ratios and liquidity ratios were comfortably maintained within management’s target range.

Last year we announced a major investment in our digital platform and we are pleased to unveil the next revamp of our award winning online portal which includes FaceBanking that will empower customers to talk to an advisor over a video call at a time and place of their choosing. We plan to continue our digital transformation program with a planned investment of AED 1 billion over the next three years.”

Group Chief Financial Officer, Surya Subramanian said:
“The operating performance for the first half of 2017 was pleasing as we saw margins improve coupled with controlled loan growth. Non-interest income declined year-on-year due to the sale of investment securities in 2016 that were not repeated in the current year. Expenses remain firmly under control and provide headroom to invest for future growth. We also delivered a further improvement in credit quality with the NPL ratio strengthening to 6.1% and this, coupled with an increase in margins and lower costs, is a position we expect to hold for the remainder of 2017.”

Re-disseminated by The Asian Banker