Emirates NBD rebounds with 12pc jump in Q1 profit

21 April, 2021 12:00 AM printer

Dubai: Emirates NBD, Dubai’s biggest lender by assets, said its first-quarter profit rebounded 12 per cent on the back of lower impairment losses and operating expenses as the economy recovers from the Covid-19 pandemic.

Net profit attributable to equity holders of the group for the period ending March 31 rose to Dh2.32 billion, the lender said in a statement to the Dubai Financial Market, where its shares trade. Impairments fell 31 per cent to Dh1.76bn and operating expenses dropped 9 per cent to Dh1.86bn, report agencies.

“These strong first quarter results enable us to accelerate the pace of investment in digital and in our international network to support future growth,” Shayne Nelson, group chief executive of Emirates NBD, said.

Emirates NBD expanded its branch network in the Kingdom of Saudi Arabia with new branches in Madinah and Makkah, he added.

Emirates NBD became the first foreign bank to get permission to open branches in Madinah and Makkah and its total branch network in Saudi Arabia now stands at six.

The bank’s total assets at the end of the first quarter remained stable at Dh695bn, while customer deposits rose by Dh1.55bn to Dh379bn. Total customer loans during the period fell by Dh5.5bn to Dh436bn.

“Decent results as net interest spread held up well sequentially, non-interest income was strong, CASA (Current Account Savings Account) deposit mix improved and management continued to maintain strong provision buffers,” EFG-Hermes said in a note on Tuesday.

“Non-interest income was the key strong area this quarter as fee income recovered because of improved transactional volumes, and as derivative and investment income were robust.”

Emirates NBD also noted that the global economy is showing signs of recovery on the back of vaccinations programmes against Covid-19. “The UAE has administered over 90 vaccines per 100 people, the second highest vaccination rate in the world”, allowing the country to loosen movement restrictions ahead of many other economies, the lender said.

The Arab world’s second biggest economy has rolled out economic support packages worth Dh388bn since the onset of the pandemic and is continuing to support the local economy. On Tuesday, the Central Bank of the UAE also extended access to the Dh50bn zero-cost liquidity facility under its Targeted Economic Support Scheme (Tess) until the end of June 2022 to help cushion the impact the Covid-19 pandemic on the economy.

Due to the measures from the government, Emirates NBD expects the UAE’s non-oil economy to grow 3.5 per cent in 2021.

In Turkey, where Emirates NBD bought Turkey’s Denizbank from Russia’s Sberbank in 2019, the recent increase in coronavirus infections remains a key risk to the summer tourism season, which is an important driver of growth and employment, it said.

Economic growth is expected to improve this year in all the countries that the group operates in, Mr Nelson said.