Emirates NBD delivered its highest first-half profit since 2019. Q2 profit was exceptionally strong at AED 3.5 billion, up 42% y-o-y. Another record half-year for retail lending and customer transactions together with improving margins drove income up 23% y-o-y. Credit quality across the Group’s footprint continues to improve with impairment down 28%. These results build on the economic recovery momentum from 2021. With its strong profitability and balance sheet the Group’s short and long-term Moody’s ratings have been upgraded.
We are extremely well positioned for rising interest rates and will continue to invest in our international and digital capabilities to support further growth. Emirates NBD is proud to have played a leading role in the DEWA and TECOM IPOs, delivering customers a fully digital platform from on-boarding and subscription through to payment.
Key Highlights – First Half 2022
Increase in operating performance as loan and deposit mix improved on continued record demand for retail financing, an efficient funding base and a substantially lower cost of risk
- Total income up 23% y-o-y to AED 14.2 billion on improved loan mix and cheaper deposits with higher interest rates feeding through to margins
- Net interest margin guidance raised by 50bps due to higher interest rates and improving margins in DenizBank
- Expenses well controlled, with high income enabling the Group to accelerate investment in Advanced Analytics and international network to drive future growth
- Impairment allowances substantially down 28% y-o-y reflecting strong writebacks and recoveries and an improving economic outlook
- Net profit of AED 5.3 billion up by a healthy 11% y-o-y
- Earnings per share up 14% to 80 fils for H1-22, underlying up 57%
Emirates NBD’s strength empowers its customers to benefit from a growing economy
- Total assets: up 3% at AED 711 billion
- Customer loans: up 1% at AED 425 billion with a record half-year for retail financing and renewed demand for corporate lending.
- Deposit mix: CASA grew AED 10 billion in H1-22 reflecting strong UAE liquidity, enabling the Group to benefit from further interest rates rises
- Credit quality: NPL ratio improved by 0.3% to 6.1% in Q2-22 on healthy writebacks and recoveries as the economy continues to strengthen. Coverage ratio very strong at 133.3%
- Capital and Liquidity: 155% Liquidity Coverage Ratio and 15.0% Common Equity Tier-1 ratio reflect the Group’s solid balance sheet, used to empower customers and create opportunities to prosper
Emirates NBD’s digital transformation enables agile delivery of new services and increased straight through processing
- Moody’s upgrade Emirates NBD’s short and long-term ratings recognising the Group’s resilient post-pandemic financial fundamentals and increased diversification.
- 30% market share: Emirates NBD and Emirates Islamic have close to a combined 30% market share of UAE Debit and Credit Card spend.
- International revenue diversifies income, representing 41% of total revenue
- IPO: leading role in the DEWA and TECOM IPOs, delivering customers a fully digital platform enabling a seamless, paperless journey from on-boarding and subscription through to payment
- Digital: 93% of new product and servicing requests now fully automated, with 5% y-o-y improvement eliminating 4 million manual interventions annually
- ESG: proudly support the ‘Dubai Can sustainability initiative’, Emirates NBD sponsor a public water refill station, which has saved 91,000 single-use plastic bottles since February 2022
- Talent: launched the ‘National Digital Talent Program’ giving a UAE talent pool practical knowledge in Digital, IT and Artificial Intelligence, supporting the UAE Government’s National Strategy for Artificial Intelligence 2031
Hesham Abdulla Al Qassim, Vice Chairman and Managing Director said:
“Emirates NBD’s profits jumped 42% y-o-y to AED 3.5 billion in Q2-22, reflecting the strong regional economy and the Group’s diversified sources of income.
Emirates NBD played a leading role in both the DEWA and TECOM IPOs, delivering customers a fully digital, straight through platform from on-boarding to payment.
We were delighted that Moody’s upgraded Emirates NBD’s short and long-term ratings, recognising the Group’s resilient post-pandemic financial fundamentals and increased diversification.
Emirates NBD has doubled down on its commitment to develop Emirati talent. In addition to enhancing the Bank’s mainstream graduate program, which attracts over 100 graduates per year, we launched the ‘National Digital Talent Program’ giving a UAE talent pool practical knowledge in Digital, IT and Artificial Intelligence, supporting the UAE Government’s National Strategy for Artificial Intelligence 2031.”
Shayne Nelson, Group Chief Executive Officer said:
Emirates NBD delivered strong results with total income rising 23% to AED 14.2 billion on improved loan and deposit mix, with higher interest rates feeding through to margins.
International operations contributed 41% of total income in H1-22. New lending increased substantially with a record half-year for retail lending and renewed corporate lending demand.
Impairment allowances substantially down 28% y-o-y reflecting the improving operating environment.
93% of new product or servicing requests are now fully automated, with a 5% improvement on last year eliminating 4 million manual interventions annually.
These strong results, along with the positive outlook for margins, enable us to accelerate our investment in our international network and digital capabilities, supporting our next stage of growth.”
Patrick Sullivan, Group Chief Financial Officer said:
We have maintained good income growth momentum, kept a firm control of costs and seen a consistent decline in the cost of risk.
Net profit of AED 5.3 billion increased by a healthy 11% y-o-y, comfortably absorbing the impact from inflation in Turkey.
The UAE banking sector continues to benefit from ample liquidity, helped by the high oil price. In H1-22 we grew CASA balances by AED 10 billion, enabling the Group to benefit from interest rates rises.
In light of further expected rate rises, coupled with improving margins at DenizBank, we have raised our net interest margin guidance raised by 50bps.
Non-funded income also grew, with significant contributions from both Emirates NBD and DenizBank, helped by an increase in transaction volumes and growth in customer foreign exchange and derivative business.
The diversified balance sheet, solid capital base and strong operating profitability are core strengths of the Group.
News Source: Dubai Media Office
