DUBAI: Emirates NBD, a leading bank in the region, delivered a strong set of results with net profit up 49% yoy to AED 7.5 billion for the half year ended June 30, 2019.
The results include a gain on disposal of a stake in Network International of AED 2.1 billion. Core Operating Profit grew 8% yoy, supported by a 10% increase in net interest income on asset growth and a 20% increase in non-interest income from higher foreign exchange revenue and increased investment banking activity.
Emirates NBD Bank’s balance sheet continues to strengthen with further improvements in liquidity and the Common Equity Tier 1 capital ratio and stable credit quality.
Total income for the first half year of 2019 amounted to AED 9.527 billion; an increase of 13% compared with AED 8.451 billion during the same period in 2018.
Net-interest income improved 10% in H12019 to AED 6.852 billion as 13% asset growth more than offset a small decline in net interest margin.
Core fee income increased 13% year-on-year on the back of higher foreign exchange income generated by the Trading and ALM desks, coupled with increased investment banking activity. Total non-interest income advanced 20% year-on-year on higher core fee income and lower impairments on investment securities.
Costs for the first half of 2019 amounted to AED 2.826 billion, an increase of 7% over the previous year due to a rise in staff costs relating to international expansion, digital and technology. The cost to income ratio at 29.7%, remains within guidance of 33% and gives headroom to invest selectively to support growth.
During the first half of 2019, the Impaired Loan Ratio remained unchanged at 5.9%. The impairment charge during this period of AED 1,226 million is 62% higher than in H12018 as the net cost of risk increased to an annualized 82bps.
Core Operating Profit grew 8% year-on-year, supported by strong asset growth and higher fee income. Loans and deposits increased by 3% and 5% respectively since the beginning of the year. The advances to deposits ratio remains comfortably within management’s target range at 92.1%.
In H12019, Emirates NBD Bank raised AED 9.7 billion of term debt issued in 7 currencies with maturities out to 20 years, more than fully covering 2019 total maturities.
As at 30 June 2019, the Bank’s Common Equity Tier 1 ratio is 17.4%, Tier 1 ratio is 20.4% and Capital Adequacy Ratio is 21.5%.
Hesham Abdulla Al Qassim, Vice Chairman and Managing Director, Emirates NBD said: “Emirates NBD delivered a healthy set of results in the first half of 2019. The Group continues to make progress on international growth. Emirates NBD is honoured to have been given permission to open twenty more branches in the Kingdom of Saudi Arabia. The Bank has opened additional branches in Egypt and all regulatory approvals for the Group’s acquisition in Turkey have been granted. In support of the ‘Year of Tolerance’, launched by His Highness Sheikh Khalifa bin Zayed Al Nahyan, Emirates NBD has participated in programmes and initiatives that celebrate the nation’s unity and commitment to diversity.”