Emirates NBD 2015 net profit jumps 39 per cent

18 January 2016

Profitability increased in challenging environment as income rose and provisions dropped

Emirates NBD has reported a 39 per cent jump in 2015 net profit as income rose and provisions dropped at Dubai’s largest lender by assets.

Net profit rose to AED7.12bn ($1.94bn) from AED5.14bn for the year ending 31 December 2014. Total income jumped 5 per cent to AED15.2bn while deposits grew by 11 per cent to AED287bn.

The impaired loans ratio for the lender dropped to 7.1 percent from 7.9 per cent for the same period. The impairment charge of AED3.4bn during the year was 32 per cent lower than in 2014. The cost of risk for Emirates NBD has also fallen for the sixth consecutive quarter while the net provisions include over AED2bn of write-backs and recoveries, which helped in boosting the bank’s coverage ratio to 111.5 per cent, the lender said in a bourse filing.

Total assets sat at AED406.6bn at the end of 2015, up from AED363bn from a year earlier. The bank’s board proposed to increase the cash dividend for 2015 to 40 per cent from 35 per cent it paid out to shareholders in 2014.

“For the first time in the bank’s history, total assets crossed the $100bn mark, total income exceeded AED15bn and net profit surpassed AED7bn,’’ Sheikh Ahmed bin Saeed al-Maktoum, Emirates NBD chairman said in the statement, adding that the lender has managed to achieve growth in revenue and net profit amid “challenging environment”.

Income for the bank’s global markets and treasury operations, however, fell sharply by AED636m to AED199m at the end of 2015 due to re-alignment of internal management reporting structure. A combination of a reduction in the size of the investment portfolio as well as the roll-off of some balance sheet hedges also contributed to reduced income, the Dubai-listed lender said.

The Islamic arm of the lender Emirates Islamic (EI) reported a 76 per cent increase in the 2015 net profit to AED641m. EI’s total income rose 25 per cent to AED 2.432bn compared with AED1.949bn in 2014.

Financing and investing receivables grew by 31 percent to AED34bn during 2015 as the lender expanded its branch network to 60 with the opening of four new branches. The bank improved the Non-performing Loan to 8.8 per cent at the end of 2015 from 10.2 per cent last year, while maintaining the coverage ratio at 90 percent, according to the statement.

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