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Dubai's Emirates NBD posts ‘highest ever’ Q1 profit of Dh6b

Quarterly income surpasses Dh10 billion for the first time

Dubai’s largest bank, Emirates NBD, on Thursday announced that its first quarter profits doubled year-on-year to a record Dh6.0 billion, with income surpassing a record Dh10 billion and cost of risk declining substantially lower.

The bank said in a statement that it also recorded its strongest ever quarter for retail lending, issuing 144,000 new credit cards and Dh 8.0 billion in retail loan disbursements.

Profits grew by 119 per cent YoY and 54 per cent quarter-on-quarter (QoQ), demonstrating the strength of the lender’s diversified business model and the regional economy.

Hesham Abdulla Al Qassim, vice chairman and managing director said as a leading bank in the region, Emirates NBD “is fully aligned with Dubai’s commitment to continue developing and stimulating entrepreneurship, attracting more foreign investment and consolidating Dubai’s position as a land of opportunity and innovation.”

He said 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.

Shayne Nelson, group chief executive officer said the total income grew 64 per cent to Dh10.5 billion on increased transaction volumes and improved margins from an efficient funding base and higher interest rates.

Nelson said the quarterly profit of Dh6.0 billion, the highest ever quarterly profit delivered by a UAE bank, was made on the back of higher income and a substantially lower cost of risk aided by significant recoveries. “We have recharged our strategy within our international footprint to deliver future growth.”

The bank’s impairment allowances dropped substantially by 66 per cent Y-o-Y on successful recoveries as coverage ratio increases to 152 per cent as credit quality improved with NPL ratio 0.4 per cent lower Q-o-Q at 5.6 per cent enabling improved credit quality guidance

Customer loans grew 3.0 per cent “with highest ever retail disbursements across conventional and Islamic retail franchise coupled with strong new corporate lending.” Deposits grew 7.0 Dh 19 billion increase in current and savings accounts. Earnings per share rose significantly by 117 per cent to 93 fils.

Total assets surged by 5.0 per cent to Dh782 billion with 187 per cent liquidity coverage ratio and 15.8 per cent common equity tier-1 ratio, reflecting the group’s solid balance sheet, the bank said.

Patrick Sullivan, group chief financial officer, said the bank’s diverse business model delivered record income, profit and retail disbursements during the quarter. “Higher income enabled us to accelerate our international expansion and investment in digital and data, which will deliver alternative revenue streams and offset against the impact from expected future interest rate cuts. Strong recoveries and the low cost of risk in the first quarter enabled us to improve our credit quality guidance,” said Sullivan.

While liquidity in the UAE banking sector remained healthy, the bank grew deposits by Dh35 billion in the first quarter, including a Dh19 billion increase in current and savings account balances, he said.