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Emirates NBD posts 63% jump in 9-month net profit, appoints new CFO

Emirates NBD; gulf bank mergers; uae bank

Dubai’s biggest bank Emirates NBD posted a 63 per cent net profit surge to AED 12.5 billion in the last nine months. The results include a AED 4.4 billion impact from the Network International transaction.

The Emirates NBD has appointed Patrick Sullivan as Group Chief Financial Officer. He replaces Surya Subramanian, who had a nine-year stint with the group.

Post DenizBank acquisition, the bank’s core operating profit grew 5% year-on-year (y-o-y), supported by a 17% increase in net interest income on loan growth and a 31% increase in non-interest income from higher foreign exchange and credit card income.

The group acquired 99.85% shares in DenizBank – the fifth largest private bank in Turkey with assets of AED 133 billion – in July this year for a total consideration of USD 2.7 billion.

Read: Dubai’s Biggest Bank Emirates NBD Plans $1.76 Billion Rights Share Sale

The group’s net profit of AED 12,483 million in the first nine months of 2019 is 63% above that posted in 2018. The results include a gain of AED 4,389 million on the partial disposal of Network International shares and a fair value measurement of the remaining stake. Core Operating Profit grew 5% y-o-y, supported by strong asset growth and higher fee income.

The Network International is the biggest payment-solution firm in the Middle East and Africa region. It is co-owned by Emirates NBD, Warburg Pincus and General Atlantic.

Emirates NBD Financial Highlights: Q3 2019 

  1. Net profit of AED 12.5 billion, up 63% y-o-y, or 3% excluding DenizBank and the impact of the Network International transaction
  2. Total Income of AED 15.5 billion improved 20% y-o-y due to loan growth and higher fee income
  3. Impairment charge increased 149% y-o-y with cost of risk increasing to an annualised 103 bps due to the inclusion of DenizBank and lower writebacks and recoveries
  4. Net Interest Margin improved 1 bp y-o-y to 2.82% helped by the positive impact of DenizBank
  5. Total assets grew 35% to AED 675.6 billion during 2019 with the inclusion of DenizBank
  6. Customer loans advanced 31% to AED 429.7 billion during 2019 with the inclusion of DenizBank
  7. Customer deposits increased 35% to AED 468.2 billion during 2019 with the inclusion of DenizBank
  8. Impaired loan ratio improved to 4.8% on a larger balance sheet with strong coverage ratio of 126.6%
  9. Liquidity Coverage Ratio of 149.3% and AD ratio of 91.8% demonstrate the Group’s healthy liquidity position
  10. Common Equity Tier 1 ratio declined by 3.7% to 13.7% during 2019 with the rights issue expected to boost capital ratios by 1.5%.

Read: ADCB to exit Qatar, Kuwait & India markets, posts net profit of AED 4.196 bn

“Emirates NBD delivered a strong set of results in the first nine months of 2019. The Bank successfully completed the acquisition of DenizBank in the third quarter of 2019. This represents a significant milestone for Emirates NBD, expanding our presence to 13 countries and establishing Emirates NBD as a leading Bank in the MENAT region with over 14 million customers,” said Hesham Abdulla Al Qassim, Vice Chairman and Managing Director, Emirates NBD.

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