Emirates NBD today announced its results for the quarter ended 31st March 2014 earning a net profit of AED 1.0 billion, up 25% from Q1 2013 and up 55% from Q4 2013.
Total income amounted to AED 3,333 million; an increase of 27% compared with AED 2,630 million in Q1 2013 and an increase of 5% compared with AED 3,162 million in Q4 2013.
Net interest income for the quarter improved by 28% to AED 2,232 million from AED 1,748 million in Q1 2013.
The improvement in net interest income is attributable to a combination of year-on-year loan growth, an improvement in the net interest margin helped by a more efficient capital and funding structure, higher growth in consumer lending and the positive impact of declining the Emirates Inter Bank Offered Rate (EIBOR rates) on loan spreads, according to the results.
Non-interest income for the quarter improved by 25% to AED 1,101 million from the previous year, driven primarily by an increase in both core banking fee and property related income.
Group Chief Executive Officer, Shayne Nelson, said, “I am delighted that in my first full quarter with the Group, we have delivered a strong set of financial results with a net profit of AED 1,042 million, up 25% in comparison with the same quarter in the previous year. This is driven by continued growth in total income which grew 27% year-on-year helped by loan growth and an increase in fee income. The Bank is well positioned to capitalise on our strong franchise and capital base and to take advantage of further expected improvements in the economic environment of Dubai and the U.A.E..” Group Chief Financial Officer, Surya Subramanian, said, The operating performance for the first quarter of 2014 has strengthened, as demonstrated by the growth in both the total income and pre-provision operating profit. In Q1 2014, pre-impairment operating profit grew by 34% over the comparable period in 2013. Costs continued to be proactively managed and, despite competitive pressures, margins were maintained helped by a change in asset mix and improving funding base.
The NPL ratio (nonperforming loan) improved to 13.8% at the end of Q1 2014. The impairment charge for the period under review increased to AED 1,267 million, compared with AED 888 million in the previous year. This was primarily driven by continued conservative provisioning, which helped improve the coverage ratio to 60.7% from 51.4% in Q1 2013.
Customer Loans as at 31st March 2014 (including Islamic financing) amounted to AED 239.7 billion, an increase of 1% from the end of 2013. Whereas customer deposits as at 31st March 2014 were AED 251.5 billion, an increase of 5% from 31st December 2013.
The Advances to Deposits Ratio improved in Q1 2014 to 95.3% from 99.5% at the end of 2013, due to continued strong growth in Current and Savings account balances.
As at 31st March 2014, the Bank’s total capital adequacy ratio and Tier 1 capital ratio were 19.2% and 15.0% respectively, compared with 19.6% and 15.3% as at 31st December 2013. The marginal decline in the Capital adequacy ratio and the Tier 1 ratio during the quarter resulted from the 2013 dividend payout and the amortization of Ministry of Finance Tier 2 sub-debt.
The Bank has said that total Emirates Islamic (EI) income (net of customers’ share of profit) for the period witnessed an increase of 30% to AED 420 million from the comparable previous period of AED 323 million. Net financing and investing receivables grew by 2% to AED 24.4 billion from the end of 2013. As at 31st March 2014, the branch and ATM/CDM network of EI totalled 50 and 175 respectively.
EI continued its growth in Q1 2014, with a net profit of AED 93 million compared to AED 33 million in the comparable period of 2013, leveraging its expanded platform in further customer acquisition. EI continues to focus on strengthening its core franchise through the expansion of its Retail, SME, and Corporate offerings.
Giving an overview of the local economy, the Bank said that the U.A.E. remains well-positioned to enjoy solid growth in 2014 driven primarily by an expansion in non-oil sectors, particularly tourism, retail and manufacturing. “We believe the construction sector will contribute more significantly to GDP growth this year as the strong recovery in real estate prices encourages new development. Following a boost to oil production in excess of 4% in 2013, we expect growth in the hydrocarbon sector to slow this year,” it pointed out.
Against an improving global economic backdrop, the bank has forecast 2014 GDP growth of 4.5% in the U.A.E. and 4.7% in Dubai.
“The bank will continue to implement its successful strategy and take advantage of the positive growth opportunity in Dubai and the region. This strategy is built around five core building blocks which include delivering excellent customer experience, building a high performance organisation, driving core businesses, running an efficient organisation and diversifying sources of income,” the statement concluded.
Source : WAM News Agency for United Arab Emirates
