Dubai's Emirates NBD Group’s first quarter 2021 net profit at Dh2.32b, gaining 12%

Dubai: Emirates NBD Group reported net profits of Dh2.32 billion for the first quarter, a 12 per cent year-on-year gain and 76 per cent up quarter-on-quarter, supported by lower provisions, improved costs and higher income from improved economic conditions.

“Emirates NBD’s increase of Q1-21 reflects the resilience and gradual economic recovery following the global disruption in 2020,” said Hesham Abdulla Al Qassim, Vice-Chairman and Managing Director.

Improved income

The Group’s total income for the first quarter amounted to Dh6.16 billion, a sharp 25 per cent spike compared with Dh4.93 billion in the preceding quarter. Net interest income was up 1 per cent over the quarter with net interest margin improving 4 basis points.

Non-funded income shot up by 133 per cent quarter-on-quarter with increased contribution from all lines and up 6 per cent year-on-year on improved fee and investment securities income. “These strong results enable us to accelerate the pace of investment in digital and in our international network to support growth,” said Shayne Nelson, Group CEO.

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Costs under control

Expenses for the first quarter - at Dh1.86 billion - was a 9 per cent improvement over the preceding quarter and year-on-year as earlier cost management actions took effect. The cost-to-income ratio at 30.3 per cent remains well within management guidance.

Loans and deposits

In the first three months of 2021, loans were down 2 per cent due to repayments of corporate loans - including TESS [Targeted Economic Support Scheme of the central bank] supported loans - and the foreign exchange translation impact on DenizBank’s loan book.

Deposits were down 1 per cent due to Turkish lira depreciation. The deposit mix continues to improve with CASA [current and savings account] balances growing by Dh16 billion.

Asset quality

Impairment allowances in the first quarter at Dh1.76 billion was down 31 per cent year-on-year following proactive provisioning. The non-performing loan ratio improved to 6.1 per cent while the coverage ratio strengthened to 125.1 per cent, demonstrating the Group’s continued prudent approach towards credit risk management.

Liquidity and capital

Liquidity remains strong with the liquidity coverage ratio at 165.1 per cent and the advances to deposits ratio at 95 per cent. “Our profitability and strong capital also enables us to maintain very prudent levels of credit impairment coverage, putting us on a very strong footing,” Patrick Sullivan, Group Chief Financial Officer.

During the first quarter, the Group raised Dh15.4 billion of senior term funding including the first ESG-linked syndicated loan from a bank in the Gulf. DenizBank issued its first Diversified Payment Rights transaction since 2014.

As at March 31, the Group’s common equity Tier 1 ratio is 15.6 per cent, tier 1 ratio is 17.9 per cent and capital adequacy ratio is 19 per cent.



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