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Emirates NBD profit up
Emirates NBD continued to deliver further improvements in asset quality, while strengthening its structural liquidity and capital ratios.
Dubai lender posts net gain of Dh1.91b, an increase of 16%, in Q2.

Emirates NBD reported on Monday a 12 per cent surge in first-half 2016 profit to Dh3.7 billion, which the largest UAE lender claimed was driven by higher income from asset growth and lower provisions due to improving asset quality.
The Dubai-headquartered bank said the healthy operating performance during the first half was helped by an increase in total income, driven by asset growth and higher core fee income, coupled with higher recoveries.
For the second quarter ending June 30, Emirates NBD made a net profit of Dh1.91 billion, an increase of 16 per cent, and warned that the UAE's economic growth is expected to slow in 2016 as lower oil prices contribute to tighter fiscal policy.
The bank reported enhanced asset quality as its impaired loan ratio improved to 6.6 per cent while the impaired loan coverage ratio strengthened to 118.5 per cent. Advances-to-deposit ratio remained comfortably within the management's target range at 96.1 per cent.
The bank said it had prudently raised over Dh4 billion of term debt at competitive pricing, through private placements, a sukuk issue and a club loan which further boosted structural liquidity. Loans increased by six per cent and deposits grew by four per cent. The bank's capital adequacy ratio and Tier 1 capital ratio were 20.5 per cent and 17.8 per cent, respectively.
Total income for the half-year ended June 30, 2016 amounted to Dh7.671 billion, an increase of two per cent compared with Dh7.555 billion during the same period in 2015. The bank's net interest income improved by two per cent to Dh5.099 billion. The improvement in net interest income is attributable to overall loan growth which helped offset a contraction in margins.
Non-interest income for the period held steady at Dh2.572 billion as core fee income grew five per cent due to growth in credit card and foreign exchange volumes, and income from property and investments declined.
Costs for the half-year ended June 30, 2016 amounted to Dh2.476 billion, an increase of 11 per cent over the previous year on the back of late-2015 growth in anticipation of increased business volumes, which has since been contained in light of the new economic reality. The cost to income ratio rose by 2.7 per cent year on year to 32.3 per cent, Emirates NBD said.
Hesham Abdulla Al Qassim, vice-chairman and managing director of Emirates NBD, said the bank continued to deliver further improvements in asset quality, while strengthening its structural liquidity and capital ratios.
"Our solid financial and operating performance, along with our leadership in digital banking innovation, was also recognised in this year's Euromoney for Excellence awards, reinforcing our position as the leading bank in the region. In particular, the award for Best Digital Bank in the Middle East is testament to the success of Emirates NBD's multichannel transformation strategy," said Al Qassim.
He said the group would continue to invest in digital initiatives to improve customer engagement and experience, in line with Dubai's vision of becoming a smart city.
"Going forward, the group is well-positioned to utilise our strong franchise, capital and liquidity base to take advantage of growth opportunities within the region."
Group chief executive officer Shayne Nelson said the bank could deliver another strong set of financial results driven by higher income from asset growth and lower provisions due to improving asset quality.
"The group's improved and resilient financial profile was also reflected in the recent upgrade of Emirates NBD's long-term rating to A3 by Moody's. We also announced our intention to invest Dh500 million over the next three years towards digital innovation as we look to launch the UAE's first digital bank for millennials."
Nelson said the digital bank would create a new paradigm in the way people bank in the UAE. It will offer customers the next generation of self-service money management with innovative tools and applications.
"Whilst we remain cautiously optimistic for the remainder of 2016, I am confident that our prudent business model shall enable us to deal with the opportunities and challenges that will present themselves," he added.
Surya Subramanian, group chief financial officer, said the bank's operating performance for the first half of 2016 continued to improve, as demonstrated by the growth in both total income and net profit.
"We remain focused on controlling expenses whilst ensuring that we continue to invest to support future growth, as demonstrated by the investment to create the UAE's first digital bank for millennials. The upgrade from Moody's reflects the bank's strong and resilient profile."

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