Emirates NBD’s net profits jumped 25% to AED9.1 billion ($2.47 billion) in the first nine months of 2022, close to the level reported for the whole of 2021, while Q3 net profit was exceptionally strong at AED3.8 billion, up 51% year-on-year (y-o-y).

Another record quarter for retail lending and customer transactions, together with improving margins, drove income 31% higher y-o-y to AED22.7 billion. New corporate lending grew by AED24 billion in the first nine months of 2022 reflecting increased business optimism and the deposit mix further improved on strong sector liquidity.

Credit quality remains healthy reflecting the region’s strong economy with impairment down 12%. We are extremely well positioned to accelerate investment in our international and digital capabilities to support further growth. Emirates NBD’s fully digital platform successfully provided an integrated ‘one-stop’ solution for recent IPO subscriptions.

Hesham Abdulla Al Qassim, Vice Chairman and Managing Director said: “Emirates NBD’s profits jumped 25% y-o-y to AED9.1 billion for the first nine months of 2022, reflecting strong regional economic growth and the success of the Group’s diversified business model. Emirates NBD played a leading role in the country’s recent IPOs, enabling new and existing customers to access and trade shares on the Dubai Financial Markets.

“Emirates NBD continues to develop its pool of Emirati talent. More than 30 UAE Nationals successfully completed the University of Oxford’s Leadership Development Program, enhancing the Group’s long-term leadership pipeline. As a pioneer in Information Technology, we launched the region’s most comprehensive Application Programming Interface developer portal, providing FinTechs, developers and corporate clients with an all-in-one ecosystem to rapidly develop innovative financial solutions.”

Shayne Nelson, Group Chief Executive Officer said:  “Emirates NBD delivered strong results with income rising 25% to AED22.7 billion on increased transaction volumes and higher margins from an efficient funding base and higher interest rates. International operations provide diversification and growth opportunities, contributing 40% of total income.

“New lending increased substantially in both retail and renewed demand for corporate lending. Emirates NBD processes over 1 million credit and debit card transactions per day, equivalent to 11 every second. Emirates NBD Egypt recorded 50% growth in e-transactions in 2022 as it successfully harnesses the Group’s IT infrastructure. These strong results, healthy profitability and positive economic outlook for the region enable us to accelerate our investment for future growth.”

Patrick Sullivan, Group Chief Financial Officer said:  “We maintained strong income growth momentum, kept a firm control of costs and are benefiting from writebacks and recoveries, reflecting a healthy regional economy. Net profit of AED3.8 billion for Q3 was 51% higher y-o-y, and exceeds $1 billion equivalent. Liquidity in the UAE banking sector remains healthy, helped by the high oil price. In 2022, we grew CASA balances by AED18 billion, enabling the Group to benefit from interest rates rises.

We expect to finish the year with margins at the top end of guidance and cost of risk within guidance. Non-funded income grew significantly, with substantial contributions from both Emirates NBD and DenizBank, helped by an increase in transaction volumes and growth in customer FX and derivative business. The diversified balance sheet, solid capital base and strong operating profitability are core strengths of the Group.”

Meanwhile, Emirates Islamic’s net profit jumped 31% to AED1,054 million for 9M’22 on higher funded and non-funded income with a significant reduction in the cost of risk reflecting improved business sentiment.

DenizBank income up by AED2.5 billion (52%) and Impairment allowances AED0.5 billion lower on strong writebacks and recoveries helping offset AED2.4 billion hyperinflation adjustment.
 
Outlook
The outlook for the Middle East remains positive despite the weak global backdrop. Higher oil prices in 2022 have pushed GCC budgets into surplus and strengthened sovereign balance sheets. Emirates NBD Research has revised up its UAE GDP growth forecast for 2022 to 7.0% whilst revising down its 2023 forecast to 3.9% on the weaker global backdrop, a stronger US dollar and higher borrowing costs.

Inflation in many countries continues to remain at multi-decade highs, leading to global interest rates rising at a faster pace than had been earlier anticipated. Egypt and Turkey have seen a strong surge in services inflow and tourism revenue offsetting some of the impact from rising energy costs on the current account deficit.  – TradeArabia News Service