Emirates NBD (ENBD), a leading banking group in the region, has posted a total income of AED18.3 billion ($4.98 billion) for the first nine months of 2020, marking an increase of 18% compared with AED15.54 billion during the same period in 2019.
The group delivered a net profit of AED5.6 billion in the first nine months of 2020, down 55% year-on-year (y-o-y) due to higher impairment charges and the gain on disposal of a stake in Network International not repeated in 2020.
Net interest income increased 21% y-o-y and non-funded income grew 9% y-o-y with the full year inclusion of DenizBank. The Group’s balance sheet remains healthy with stable credit quality coupled with strong liquidity and capital ratios. The Group continued to increase impairment allowances for Stage 1 and 2 coverage in light of the challenging economic climate.
Hesham Abdulla Al Qassim, Vice Chairman and Managing Director, Emirates NBD said: “The UAE Government has followed its earlier decisive action to protect the health of UAE residents with clear, prescriptive and measured guidelines to reopen the economy with safety continuing to be the top priority.”
“The UAE Central Bank’s Targeted Economic Support Scheme has been influential in supporting customers and banks now in order to prevent credit issues arising later. I am proud that Emirates NBD has provided assistance to customers affected by coronavirus as well as being actively involved in community initiatives.
“The Bank’s results reflect a pick-up in economic activity during the third quarter and Emirates NBD has a strong balance sheet which we will continue to use to help drive economic growth.We are grateful to the UAE’s wise leadership during these challenging times,” he added.
Shayne Nelson, Group Chief Executive Officer said: “Despite the challenging conditions that individuals and businesses have faced over the last six months, Emirates NBD has remained profitable and maintained a strong balance sheet. We have used that strength to support our customers affected by the disruption caused by Covid-19 to help avoid credit issues developing in future. As the economy has started to reopen, we continue to provide nearly AED6.6 billion of interest and principal deferrals to over 98,500 customers.
“The safety and well-being of our customers and employees remains our top priority. As branches and offices reopen, we have maintained additional deep cleaning and sterilization protocols and provided training in precautionary measures to frontline staff. Throughout the year, we have seen more customers utilise our digital banking offering as a secure and safe platform through which to bank.”
Patrick Sullivan, Group Chief Financial Officer said: “The operating profit of AED6.1 billion in the first nine months of2020 was resilient given the challenging operating environment. Net interest income declined throughout 2020 due to lower interest rates but non-funded income improved in the third quarter of 2020 as volumes picked-up following the acute disruption in Q2 2020.”
Emirates Islamic (EI)
EI reported a net loss of AED311 million for the first nine months of 2020 mainly due to higher impairments on its financing and investment book. EI’s total income of AED1,574 million for the first nine months of 2020 was down 23% compared to the same period last year due to lower income from financing receivables and investments and lower fee and commission income due to the economic disruption caused by Covid-19.
EI’s total assets reached AED70.1 billion as at 30 September 2020. Financing and Investing Receivables increased by 9% to AED41 billion since the start of year and Customer deposits grew by 1% to AED45.9 billion. CASA balances represented 70% of total customer accounts. EI’s headline financing to deposit ratio at 89% is comfortably within the management’s target range. EI successfully issued a benchmark five-year senior Sukuk during Q3 which further improved the liquidity profile of the Bank.
DenizBank contributed total income of AED5,911 million and net profit of AED1,239 million to the Group for the first nine months of 2020. It had total assets of AED127 billion, net loans of AED79billion and deposits of AED87billion at the end of September 2020.
Recent economic data suggests there has been some recovery in global economic activity, but activity remains well below its level at the beginning of 2020. Monetary policy remains highly accommodative, but some of the emergency fiscal stimulus programs are winding down and governments are mindful of widening deficits and increasing debt levels.
The Group’s Research team forecasts a 5.5% contraction in the UAE economy this year, as both oil and non-oil sectors are impacted by the coronavirus. UAE GDP growth is expected to grow by 1.2% in 2021, with non-oil sector growth forecast to grow by 2.5% next year. – TradeArabia News Service