Wednesday 22 September 2021

Hesham Abdulla Al Qassim and Shayne Nelson

ENBD posts 17% surge in H1 net profit to $1.3bn

DUBAI, July 28, 2021

Emirates NBD (ENBD) has posted a 17% increase in net profit for first-half of 2021 to AED4.8 billion ($1.3 billion) on stable margins, effective cost management and a significant reduction in the cost of risk reflecting improved business sentiment.

Emirates NBD continues to support businesses and customers recovering from the global pandemic, while accelerating the pace of investment in digital and its international network to support future growth, a bank statement said.

Retail lending recorded its best ever quarter, including record growth for credit cards, personal loans, and home loans.

Key highlights

Strong operating performance on higher transaction volumes reflecting improving economic conditions coupled with firm cost management

•    Total income up 9% over the preceding half year due to a marked increase in transactions and stable NIMs
•    Expenses declined 6% y-o-y to AED3.8 billion on disciplined cost management action
•    Impairment allowancesreduced38% y-o-y with cost of risk substantially improving to 114bp, lowest since 2019 pre-pandemic, while still maintaining best-in-class coverage ratios  
•    Net interest margin stable at2.45%with lower cost of funding from record CASA balances mitigating lower yields on loans and liquid assets

Strong capital and liquidity combined with a healthy deposit mix and higher profits enable the Group to support customers and empower them to benefit from the expanding economy

•    Total assets stable during the first half at AED694 billion maintaining a strong asset base
•    Customer loans at AED438 billion with Q2-21 a record quarter for growth in personal loans, credit cards and mortgages
•    Deposit mix: highest ever CASA balances, increasing by AED25 billion, positioning the Group very well for eventual rate rises
•    Credit Quality: NPL ratio increased marginally by 0.1%to 6.3%in H1-21 with coverage ratio strengthening to122.5% reflecting Group’s prudent approach to credit impairment
•    Capital and Liquidity: 158.8% Liquidity Coverage Ratio and 15.6%Common Equity Tier-1 ratio reflect the Group’s core strengths enabling continued support to customers and the wider community

Emirates NBD continues to support and adapt to customers’ changing needs and preferences, enabling secure banking through many innovative digital channels. The Group has reinforced its commitment to sustainability and responsible investment while further expanding its international presence.

•    Customer support: AED10.7billion of support provided to over 120,000customers
•    Customer repayments: AED6.8billion of repayments demonstrate the Group’s successful efforts in mitigating the financial impact on customers from Covid-19
•    Social responsibility: Private Banking teams received certified training in sustainable and responsible investing, reinforcing Emirates NBD's commitment to embrace sustainable practices
•    ESG: ?he first bank in the UAE to offer an eco-friendly debit card made from recycled plastic
•    ESG: The first bank from the Gulf region to issue an ESG-linked syndicated loan, with cost of the $1.75 billion facility a function of environmental and social targets
•    Investment Banking: EmCap had a record half year, leading 68 bond and loan transactions, raising $50 billion for clients from 15 countries in multiple currencies
•    DenizBank: Successfully issued a $410 million multicurrency syndicated loan, becoming the first Turkish bank syndication to include a Renminbi denominated tranche, reflecting DenizBank’s appeal amongst international investors
•    Digital: Liv. digital bank continues to successfully expand; servicing more than 470,000 customers in the UAE and 75,000 customers in KSA
•    International Expansion: Increased KSA branch network to seven with the opening of a third branch in Riyadh

Hesham Abdulla Al Qassim, Vice Chairman and Managing Director said: “Emirates NBD’s profits increased by 17% for the first-half of 2021 to AED4.8 billion as business sentiment continues to improve. The Group’s strong first-half results demonstrate its financial resiliency and the success of its diversified business model. “

“The UAE economy has remained open thanks to the speed and success of the UAE’s vaccination programme. With 70% of the population fully vaccinated, and with one of the highest testing rates globally, the UAE continues to be a safe and attractive destination for residents and visitors.

“During the Holy Month of Ramadan, the Group encouraged people from all cultures and faiths in the UAE to fast with a friend for a day and, in recognition of these efforts, we were delighted to donate AED500,000 to the Al Jalila Foundation,” he added.

Shayne Nelson, Group Chief Executive Officer said:  “Emirates NBD’s profits jumped17% as the impact of lower interest rates was more than offset by firm cost management and a significant improvement in the cost of risk to pre-pandemic levels.”

“I am proud that we continue to use the Group’s strong balance sheet to support our customers, empowering them to benefit from the expanding economy. The Group expanded its branch presence in the Kingdom of Saudi Arabia to seven with the opening of a third branch in Riyadh.

“We reinforced our commitment to sustainable and responsible investment and launched the UAE’s first eco-friendly debit card made from recycled plastic. In the second quarter we upgraded our global payment system, enabling much faster cross-border payments and more visible tracking, improving the overall experience for our customers,” he added.


The global economic recovery remains uneven, influenced by the success of vaccination programmes but threatened by the emergence of new variants of the virus. The speed of the UAE’s vaccination programme has allowed the economy to remain open, even as other countries have struggled to contain the spread of the virus, and we expect the recovery in the non-oil sector to gain momentum in the second-half of 2021.

Emirates NBD Research expects the non-oil economy to grow by 3.5% this year, although curbs on oil production will weigh on GDP growth, which is expected to reach 1.5% in 2021.  

The Kingdom of Saudi Arabia’s economy is expected to rebound this year after contracting 4.1% in 2020.  Oil production cuts in the first quarter of 2021 will weigh on the GDP reading, even as the non-oil sector is expected to grow 4.0% this year.  

The Egyptian economy has held up well in the face of the global pandemic, making it one of the few countries in the world to register positive GDP growth last year. While GDP growth likely slowed to 2.9% in the fiscal year ended June 2021, it is expected to accelerate to 4.9% next year.  

Turkey also posted positive GDP growth in 2020, and the market expects improved growth of 5.5% this year.  However, inflation uncertainty may weigh on the Lira. – TradeArabia News Service


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