Emirates NBD announces first half 2016 Results

DUBAI,19th July 2016 (WAM) - Emirates NBD’s solid financial and operating performance, along with its best-in-class digital banking platform, were also recognised in this year’s Euromoney Awards for Excellence. Emirates NBD became the first bank in the Middle East to win in three categories, namely Best Bank in the Middle East, Best Bank in the UAE, and Best Digital Bank in the Middle East. This recognition coincided with the Bank’s announcement to invest 500 million dirhams over the next three years towards digital innovation as the Bank looks to launch the UAE’s first digital bank for millennials. This will create a new paradigm in the way people bank in the UAE. It will offer customers the next generation of self-service money management with innovative tools and applications. Commenting on the Group’s performance, Hesham Abdulla Al Qassim, Vice Chairman and Managing Director, Emirates NBD said: "I am very pleased with the strong performance that Emirates NBD has delivered in the first half of 2016. In H1 2016, Emirates NBD achieved a 12% growth in net profit to AED 3.7 billion. Emirates NBD continued to deliver further improvements in asset quality, whilst strengthening its structural liquidity and capital ratios. Our solid financial and operating performance, along with our leadership in digital banking innovation, were also recognised in this year’s Euromoney for Excellence awards, reinforcing our position as the leading bank in the region. In particular, the award for Best Digital Bank in the Middle East is testament to the success of Emirates NBD’s multichannel transformation strategy. The Group continues to invest in digital initiatives to improve customer engagement and experience, in line with Dubai’s vision of becoming a Smart City. Going forward, the Group is well positioned to utilise our strong franchise, capital and liquidity base to take advantage of growth opportunities within the region." Group Chief Executive Officer, Shayne Nelson said: "I am delighted that we have delivered another strong set of financial results driven by higher income from asset growth and lower provisions due to improving asset quality. The Group’s improved and resilient financial profile was also reflected in the recent upgrade of Emirates NBD’s long-term rating to A3 by Moody’s. We also announced our intention to invest AED 500 million over the next three years towards digital innovation as we look to launch the UAE’s first digital bank for millennials. This will create a new paradigm in the way people bank in the UAE. It will offer customers the next generation of self-service money management with innovative tools and applications. Whilst we remain cautiously optimistic for the remainder of 2016, I am confident that our prudent business model shall enable us to deal with the opportunities and challenges that will present themselves Group Chief Financial Officer, Surya Subramanian said: "The operating performance for the first half of 2016 continued to improve, as demonstrated by the growth in both total income and net profit. We remain focused on controlling expenses whilst ensuring that we continue to invest to support future growth, as demonstrated by the investment to create the UAE’s first digital bank for millennials. During the first half of 2016, we took advantage of favourable market conditions to prudently raise over AED 14 billion of term funding, further boosting our structural liquidity. The upgrade from Moody’s reflects the Bank’s strong and resilient profile." Total income for the half year ended 30 June 2016 amounted to AED 7,671 million; an increase of 2% compared with AED 7,555 million during the same period in 2015. Net interest income improved by 2% in H1-16 to AED 5,099 million. The improvement in net interest income is attributable to overall loan growth which helped offset a contraction in margins. Non-interest income for the period held steady at AED 2,572 million as core fee income grew 5% due to growth in credit card and foreign exchange volumes, and income from property and investments declined. Costs for the half year ended 30 June 2016 amounted to AED 2,476 million, an increase of 11% over the previous year on the back of late 2015 growth in anticipation of increased business volumes, which has since been contained in light of the new economic reality. The cost to income ratio rose by 2.7% y-o-y to 32.3%. Excluding one-offs, the cost to income ratio would be 33.0%. During the quarter, the Impaired Loan Ratio improved further to 6.6% from 7.1% at the end of 2015. The impairment charge in H1-16 of AED 1,456 million is 27% lower than in H1-15 as the cost of risk continues to normalise. This net provision includes AED 960 million of write-backs and recoveries, and together helped boost the coverage ratio to 118.5%. Net profit for the Group was AED 3,718 million in H1-16, 12% above the profit posted in H1-15. The increase in net profit was driven by growth in net interest income and reduced provisions. Loans increased by 6% and Deposits grew by 4% during the first half of 2016. The Advances to Deposits Ratio remains comfortably within Management’s target range at 96.1%. During the first half of 2016, the Bank prudently raised over AED 14 billion of term funding through private placements, a sukuk issue and a club loan. Term funding now represent 12% of total liabilities, further boosting structural liquidity. As at 30 June 2016, the Bank’s capital adequacy ratio and Tier 1 capital ratio were 20.5% and 17.8% respectively. - Emirates News Agency, WAM – http://www.wam.ae/en/news/emirates/1395297891800.html