Dubai's biggest bank reports 29% increase in half-year profits
Emirates NBD, Dubai’s biggest bank, reported a 30 percent rise in Q2 profit on Wednesday, boosted by an increase in net interest income.
The bank made a record Q2 profit of $716 million (AED2.6bn), up from $550m (AED2.02bn) in the same three months last year.
Emirates NBD said its net interest income grew by 20 percent, boosted by loan growth and a further improvement in margins.
“The operating performance for the second quarter of 2018 was pleasing as we delivered a record quarterly net profit supported by growth in our core business, said group CFO, Surya Subramanian.
“Margins improved 14 bps during the quarter as rate rises flowed through to the loan book and more than offset a modest increase in deposit costs."
Emirates NBD reported record half-year net profit of $1.36bn (AED5bn), up 29 percent year-on-year.
“For the first time in the group’s history, Emirates NBD delivered a half yearly net profit in excess of AED 5 billion underpinned by higher net interest income on the back of loan growth and improving margins and a lower cost of risk, said Group CEO, Shayne Nelson.
“The bank’s balance sheet remains solid with a further strengthening in capital due to retained earnings, coupled with stable liquidity and credit quality ratios,” he added.
The banks costs during the first six months of the year an increased by 17% over due to increased staff and IT costs relating to its digital transformation and technology refresh. The group ‘s new digital bank for millennials, Liv., has attracted over 100,000 customers.
“Liv. is now the fastest growing digital bank in the UAE and 84% of customers are new to the bank,” said Hesham Abdulla Al Qassim, vice chairman and managing director, Emirates NBD.
Costs were also higher as a result of international branch expansion and a rise in costs associated with its $3.2bn deal to acquire Turkey's Denizbank.
In its outlook for the remainder of the year, Emirates NBD said it expects the UAE’s real GDP growth to accelerate to 2.2% in 2018 from 1.5% last year.
“The recent decision by OPEC to boost production significantly in H2 poses an upside risk to our forecast,” the bank said.
“Survey data indicates that growth in the non-oil sector has been solid in H1 2018, underpinned by investment in infrastructure as the country prepares for Expo 2020, with the public sector driving this investment.”
The banks said household consumption is likely to remain constrained against a backdrop of modest job and wage growth, higher taxes and increased fuel costs.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.