• January 16, 2017
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Emirates NBD releases full year 2016 results

Emirates NBD, the UAE’s largest lender, delivered a solid set of results with net profit up 2% to AED 7.24 billion. The operating performance was helped by further recoveries from legacy impaired loans which offset lower non-interest income. Net interest income declined 1% as a contraction in margins more than offset asset growth. These results have enabled the Board of Directors to recommend to maintain the 2016 dividend at 40 fils per share.

• Net profit of AED 7.24 billion, up 2% y-o-y
• Total Income of AED 14.7 billion, declined 3% y-o-y mainly due to lower non-interest income.
• Total assets at AED 448.0 billion, up 10% from end 2015
• Customer loans at AED 290.4 billion, up 7% from end 2015
• Customer deposits at AED 310.8 billion, up 8% from end 2015
• Net Interest Income declined 1% as a contraction in margins more than offset asset growth.
• Core gross fee income held steady despite one-off impact in Q4-16 from the Egyptian Pound devaluation whilst income from property and investments securities declined on lower disposals.
• Cost of risk improved to 83 basis points as impairment charge of AED 2,608 million is 23% lower than in 2015, helped by over AED 3 billion of writebacks and recoveries
• Enhanced asset quality during 2016 as Impaired Loan ratio improved to 6.4% whilst the Impaired Loan Coverage ratio strengthened to 120.1%.
• Advances to Deposit ratio at 93.4% remains comfortably within the management’s target range
• The Bank prudently raised over AED 20 billion of term debt at competitive pricing, through private placements, a sukuk issue and a club loan which further boosted structural liquidity
• Tier 1 Capital Ratio, at a healthy 18.7%, grew on the back of retained profit
• Proposed dividend maintained at 40 fils per share

Commenting on the Group’s performance, His Highness Sheikh Ahmed Bin Saeed Al Maktoum, Chairman, Emirates NBD said:

“2016 marked another successful year for Emirates NBD as we continued to deliver improved profitability and a stronger balance sheet amid a challenging environment. We are proud to have launched a number of digital initiatives to support the ‘Smart Dubai’ vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. These include a futuristic banking space as part of Dubai Future Foundation’s prestigious Museum of the Future and a pilot blockchain network for international remittance and trade finance.

I am very pleased to announce that Emirates NBD has been granted licenses to open 3 additional branches in the Kingdom of Saudi Arabia and our first branch in India. As a leading bank in the region and a front-runner in digital banking innovation, we are well placed to take advantage of growth opportunities within the region. In light of the solid performance by the Bank, we are proposing to maintain the cash dividend at 40 fils per share.”

Mr. Hesham Abdulla Al Qassim, Vice Chairman and Managing Director, Emirates NBD said:

“Despite challenging economic conditions, Emirates NBD has delivered a healthy set of financial results. 2016 marked a year of digital innovation as the Bank made bold strides in advancing our digital banking capabilities and the multichannel transformation of our processes, products and services. We are very pleased to have been awarded, for the second consecutive year, ‘Bank of the Year’ in the UAE by The Banker.

This recognises Emirates NBD’s strong financial profile and pioneering approach to the digitalisation of banking. The Group is well positioned to utilise our strong franchise, capital and liquidity base to take advantage of growth opportunities in our preferred markets. We are confident that, going forward, our prudent business model shall continue to deliver a solid performance and deal with the opportunities and challenges that will present themselves.”

Group Chief Executive Officer, Shayne Nelson said:

“Emirates NBD delivered a solid performance in 2016. Net profit increased by 2% to AED 7.24 billion, underpinned by asset growth, a control on expenses and an improved cost of risk. The Bank’s stable and resilient financial profile were recognized by Moody’s in June when they upgraded Emirates NBD’s long-term rating to A3. The Group’s liquidity position remained strong, bolstered by a stable and highly diversified deposit base and our ability to raise over AED 20 billion of term funding. Given the ongoing challenging environment, we will remain focused on controlling expenses and managing risks whilst ensuring that we continue to invest to support future growth. I am confident that Emirates NBD will continue to deliver excellent customer service and superior value to our shareholders.”

Re-disseminated by The Asian Banker