Hesham Abdulla Al Qassim and Shayne Nelson
Emirates NBD Q1 net profit hits $509m
DUBAI, 7 days ago
Emirates NBD, a leading bank in the region, posted net profit of Dh1.87 billion ($509 million) for the first quarter of 2017, marking a rise of 4 per cent year-on-year (y-o-y) and 1 per cent quarter-n-quarter (q-o-q).
The operating performance was helped by a control on expenses and lower provisions, a statement said, adding that net interest income improved 1 per cent q-o-q due to loan growth coupled with an improvement in margins.
Core gross fee income increased 27 per cent q-o-q and 7 per cent y-o-y 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 bank’s balance sheet continues to strengthen with further improvements in credit quality and liquidity, coupled with solid capital ratios.
The bank’s total Income reached Dh3.6 billion during the period, up 4 per cent q-o-q and declined 7 per cent y-o-y due to lower gains from the sale of investments.
Total assets totalled Dh452 billion at the end of the quarter, up 1 per cent from end of 2016.
Hesham Abdulla Al Qassim, vice chairman and managing director, Emirates NBD said: “Emirates NBD made an encouraging start to the year with a 4 per cent growth in net profit and further strengthened its balance sheet, with improvements in credit quality and liquidity, coupled with strong capital ratios.”
“We are delighted that our Investment Bank and Asset Management units successfully completed the UAE’s first IPO of 2017 with the launch of ENBD REIT. We are also particularly pleased to be ranked the UAE’s most valuable banking brand, and 75th worldwide, by The Banker.”
Group chief executive officer Shayne Nelson said: “Emirates NBD delivered a solid set of results in the first quarter of 2017. Net profit increased by 4 per cent to Dh1,873 million, underpinned by a control on expenses and an improved cost of risk.”
“The Group’s liquidity position remained strong and we are focused on improving margins by enhancing our funding base. We unveiled Liv., the UAE’s first digital bank targeted at millennials, which offers a differentiated digital experience for a new generation of customers. We are well positioned to utilise our strong franchise, digital capabilities and financial strength to take advantage of growth opportunities within the region,” he added.
Group chief financial officer, Surya Subramanian said: “The operating performance for the first quarter of 2017 was pleasing as we saw margins improve compared to Q4-16. This margin increase is due to an improvement in funding costs coupled with loan pricing benefiting from rising interest rates.
“I am also glad to see that the cost control measures implemented in 2016 have taken effect. The cost to income ratio, at 30.9 per cent, is comfortably within management targets, enabling us to invest to support future growth. We also delivered a further improvement in credit quality and this, coupled with an improvement in margins, and lower costs is a position we expect to hold for the remainder of 2017.”
“We expect growth in the UAE to improve to 3.4 per cent this year as higher oil prices contribute to improved consumer and business sentiment in 2017 and facilitate slightly higher government spending,” a bank statement said.
“We expect the UAE’s growth to accelerate to 4.1 per cent in 2018, with Dubai expected to enjoy stronger non-oil activity growth on the back of increased investment in infrastructure. Anticipation of a 5 per cent VAT to be introduced in early 2018 may boost spending in the second half of 2017, as consumers bring forward purchases that otherwise would be made in 2018.” – TradeArabia News Service