Emirates NBD’s profit surges 92% to AED 17.5 billion in nine months

Emirates NBD’s profit surges 92% to AED 17.5 billion in the first nine months of 2023 on significant loan growth, a stable low-cost funding base, increased transaction volumes and substantial recoveries.

Q3-23 profit exceeded AED 5 billion for the third consecutive quarter reflecting a buoyant regional economy. Emirates NBD’s market-leading deposit franchise grew AED 67 billion, including AED 33 billion of low-cost Current and Savings Accounts in 2023. Strong Retail lending momentum, coupled with landmark multinational-customer deals drove a healthy 8% loan growth.

All business units delivered higher income. Emirates NBD is the Principal Banking Partner for COP28. The Group successfully launched its Sustainable Finance Framework and raised USD 750 million with the largest green bond ever issued by a regional bank, helping our customers align to UAE Vision 2030.

Key Highlights – 9M’23

92% increase in profit on significant loan growth, a stable low-cost funding base, increased transaction volumes and substantial recoveries

Total income up 44% to AED 32.7 billion on excellent deposit mix, solid loan growth and strong fee & commission growth across all business segments
Solid Loan growth, up an impressive 8% on strong Retail lending momentum with Corporate Banking closing landmark deals for large multinational customers
Deposit mix is a key strength. Deposits grew AED 67 billion in 9M’23 including AED 33 billion of low-cost Current and Savings Accounts
Net interest margin rose 90 basis points y-o-y to 4.00% on improved loan & deposit mix and higher interest rates
Impairment allowances substantially down 54% y-o-y as credit quality improved, reflecting the Group’s prudent approach to credit provisions
Balance Sheet grew 13% to AED 836 billion at Q3-23
Earnings per share up significantly by 96% to 271 fils
One of only three UAE banks to have an investment grade unsupported Fitch Viability Rating

Emirates NBD’s investment in customer focused services & products is propelling business growth

SME lending boosted 34% in UAE, supporting this bedrock sector of the economy
One-third market share of UAE Credit Card spend as card spend grew 28 % y-o-y
‘ENBD X’ mobile banking app successfully rolled out, using latest technology, security and user experience trends propelling it to the #1 banking app in the region
Digital wealth platform expanded giving customers access to more than 11,000 global and regional equities, elevating ENBD X as a one-stop solution for both everyday banking and wealth management
Signature by Priority Banking introduced, offering ultra-high-net-worth customers unrivalled benefits, services and privileges
AUMs grew by an impressive 28% in 2023, reflecting Emirates NBD’s full service platform giving customers access to over 11,000 global equities
Landmark corporate deals including AED 10 billion hybrid Credit Facilities and USD 3.5 billion revolving Credit Facility for large multinational customers
'Emirates NBD Pay’, our Merchant Acquiring service, onboarded more than 20 clients, with over AED 3.5 billion transaction value since launch
Innovation Fund makes exciting investment in Komgo to revolutionise its digital trade finance offering
First Repo transaction executed with a KSA Asset Manager and first Islamic Repo with a UAE bank
KSA loan growth up 26% y-o-y as both Corporate and Retail lending accelerating as branch network expands to 13

Looking to the future as the UAE hosts COP28, Emirates NBD is delivering ESG solutions to customers as their Net Zero ambitions and sustainability goals drive economic activity

Principal Banking Partner of COP28, marking Emirates NBD’s commitment to UAE’s Year of Sustainability
ESG-Linked Supply Chain Finance Programme pioneered in collaboration with Emirates Global Aluminium
Best Bank for ESG in the UAE at the Euromoney Excellence Awards 2023
Sustainable Finance Framework published allowing green and sustainability-linked bond issuance
USD 750 million green-bond issued, the largest ever from a regional bank
Net Zero Goals commitment by signing UAE Climate-Responsible Companies Pledge
Gender equality commitment by signing UAE Gender Balance Pledge
Accelerator programme launched with Green FinTechs to boost sustainability-focused finance solutions
Carbon Trading introduced as Emirates NBD becomes first UAE bank to offering carbon emission offsetting solution to customers
Deniz Ventures makes Innovation Fund investment in sustainability start-up Erguvan

Hesham Abdulla Al Qassim, Vice Chairman and Managing Director said:

“Emirates NBD achieved a record profit of AED 17.5 billion in the first nine months of 2023, a testament to its expanding regional presence and strong digital capabilities. The bank's robust performance was supported by a thriving economy and a dedication to delivering exceptional service through innovative products and services. Expanding its branch network to 13 in the Kingdom of Saudi Arabia contributed to a notable 26% y-o-y increase in lending across Corporate and Retail banking. Furthermore, lending to Small and Medium Enterprises in the UAE surged by 34%, emphasizing the bank's support for this crucial sector. Emirates NBD's commitment to Net Zero 2050 and Gender Balance goals in the UAE was reaffirmed, solidifying its role as the Principal Banking Partner of COP28."

Shayne Nelson, Group Chief Executive Officer said:

Emirates NBD experienced a remarkable 92% surge in profit during the first nine months of 2023, attributed to substantial loan growth, a stable low-cost funding base, increased transaction volumes, and significant recoveries. The bank achieved an impressive 8% loan growth, fueled by strong momentum in Retail lending and notable success in securing major deals for large multinational customers within the Corporate Bank. Additionally, the bank's deposit franchise saw substantial growth, adding AED 67 billion, including AED 33 billion from low-cost Current and Savings Accounts. Notably, the rollout of the cutting-edge 'ENBD X' mobile banking app further solidified its position as the region's top banking app, thanks to its advanced technology, security features, and user-friendly experience. The expansion of the digital wealth platform provided customers access to over 11,000 global equities, while enhancements to the Priority offering for ultra-high-net-worth customers resulted in a significant 28% growth in Assets Under Management.

Patrick Sullivan, Group Chief Financial Officer said:

"Emirates NBD continued its strong performance, with quarterly profits surpassing AED 5 billion for the third consecutive quarter, fueled by substantial income growth across all business units. The Group's stable low-cost Current and Savings Account deposit base proved advantageous, particularly with the rise in interest rates. Leveraging its robust capital base, the Group's balance sheet expanded by 13% to AED 836 billion in 2023. Notably, Emirates NBD's strength was acknowledged by Fitch, with the bank being one of only three in the UAE to hold an investment-grade unsupported Viability Rating. Moreover, the successful launch of the Sustainable Finance Framework resulted in the issuance of the largest green bond ever by a regional bank, amounting to USD 750 million, facilitating alignment with the goals outlined in the UAE Vision 2030."

Business Performance

Retail Banking and Wealth Management (RBWM) continued its excellent performance with its highest ever nine-month revenue, strongest ever acquisition, and substantial growth in balance sheet.
Lending increased 16% by AED 15 billion and Deposits grew by AED 29 billion in first nine months of 2023 with a strong CASA to Deposits ratio of 78%
One-third market share of UAE Credit Card spend as card spend grew 28% y-o-y
Income grew 36% on the back of record volumes, improved margins and highest ever non-funded income
‘ENBD X’ mobile banking app successfully rolled out, using latest technology, security and user experience trends, propelling it to the #1 banking app in the region
Signature by Priority Banking launched offering ultra-high-net-worth customers unrivalled benefits, services and privileges
AUMs grew by an impressive 28% in 2023 on the back of the Digital wealth platform expansion, reflecting Emirates NBD’s full-service platform giving customers access to over 11,000 global equities
Corporate and Institutional Banking strengthened its strategic partnership with major Government entities and Corporates by enhancing digitized service platforms
Profitability jumped 104% due to significant growth in revenue on increased lending activity, higher cross-sell across products and strong recoveries
Corporate lending (ex. Sovereign) up 15% on strong origination throughout region in Manufacturing, Trade, Transport, Communication and conglomerates
Landmark corporate deals including AED 10 billion hybrid Credit Facilities and USD 3.5 billion revolving Credit Facility closed for large multinational customers
‘Emirates NBD Pay’, our Merchant Acquiring service, onboarded more than 20 clients, with over AED 3.5 billion transaction value since launch
ESG-Linked Supply Chain Finance Programme launched in collaboration with Emirates Global Aluminium
Global Markets and Treasury delivered an outstanding performance, generating almost AED 3 billion in income in the first nine months of 2023.
Income grew by 186% driven by favourable Balance Sheet positioning coupled with a significant increase in banking book investment income
The trading desk reported robust numbers with Foreign Exchange trading posting 89% growth
Sales delivered strong growth, driven by Foreign Exchange and Structured products
Group Funding issued a USD 750 million green bond, the largest ever from a regional bank
DenizBank profit up 63% to AED 1.9 billion helped by higher income and strong recoveries

Outlook

GCC economies have been resilient against a weaker global backdrop and higher interest rates. PMI surveys indicate robust activity in non-oil sectors in the first half of 2023 across the region. Emirates NBD Research revised up their forecast for UAE non-oil GDP growth to 5.0% this year, from 3.5% previously, with their forecast for UAE growth in 2023 adjusted to 2.9% on the expectation of a contraction in hydrocarbon GDP. The UAE’s national energy strategy expects up to AED 200 billion of investment as it triples the contribution of renewable energy by 2030. Other economic sectors such as tourism are flourishing with Dubai tourist numbers recovering to pre-pandemic levels. In the wider MENAT region, Egypt continues to explore asset sales reflecting their commitment to revamp the economy and Türkiye increased interest rates to help address inflation.

News Source: Dubai Media Office