Emirates NBD’s profits jumped 25% in the first nine months of 2022, close to the level reported for the whole of 2021. Q3 profit was exceptionally strong at AED 3.8 billion, up 51% y-o-y, exceeding US$ 1 billion equivalent. Another record quarter for retail lending and customer transactions, together with improving margins, drove income 31% higher y-o-y. New corporate lending grew by AED 24 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.
| Total Income AED 22.7 billion31% y-o-y |
| Provisions AED 3.3 billion12% y-o-y |
| Net ProfitAED 9.1 billion25% y-o-y |
| Expenses AED 6.4 billion12% y-o-y 8% y-o-y |
| NIM3.10% |
| NPL Ratio5.8% |
| CET-1 Ratio15.5% |
| Cost: Income ratio28.2% |
Key Highlights – First nine months of 2022
- Strong improvement in operating performance on record demand for retail financing and new corporate lending, an improved deposit mix and a substantially lower cost of risk
- Total income up 31% y-o-y to AED 22.7 billion on improved loan and deposit mix with higher interest rates feeding through to margins
- Net interest margin significantly rose to 3.10% and trending towards top end of guidance
- Expenses well controlled, as the Group accelerates investment in Advanced Analytics and international network to drive future growth
- Impairment allowances substantially down 12% y-o-y reflecting robust operating environment
- Net profit of AED 9.1 billion up by a healthy 25% y-o-y
- Earnings per share up 28% to 138 fils, underlying up 63%
- Emirates NBD’s strength empowers its customers to benefit from a growing economy
- Total assets: up 5% at AED 721 billion
- steady as strong Retail and Islamic financing coupled with renewed demand for corporate lending offset Sovereign repayments
- CASA grew AED 18 billion in 9M’22 reflecting strong UAE liquidity, enabling the Group to benefit from interest rates rises
- Credit quality: NPL ratio improved by 0.5% to 5.8% in 9M’22 on healthy writebacks and recoveries as regional economies remain robust. Coverage ratio very strong at 142.6%
- Capital and Liquidity: 152% Liquidity Coverage Ratio and 15.5% Common Equity Tier-1 ratio reflect the Group’s solid balance sheet, used to empower customers and create opportunities to prosper
- Emirates NBD and Emirates Islamic have a 30% market share of UAE Debit and Credit Card spend, bigger than next three banks combined
- Emirates NBD process over 1 million transactions per day, equivalent to 11 every second
- leading role in recent IPOs, delivering customers a fully digital, one-stop, seamless solution
- Launched the region’s most comprehensive and ready-to-use financial Application Programming Interface (API) developer portal, providing FinTechs, developers and corporate clients with an all-in-one ecosysterm to rapidly develop innovative financial solutions
- Emirates NBD Egypt recorded 50% growth in the volume of e-transactions in 2022 as it successfully harnesses the Group’s IT infrastructure
- revenue diversifies income, representing 40% of total revenue
- Launched the second cohort of our elite graduate program, Ruwad, comprising more than 30 UAE Nationals. Participants successfully completed the University of Oxford’s Leadership Development Program, enhancing the Group’s long-term leadership pipeline
Hesham Abdulla Al Qassim, Vice Chairman and Managing Director said:
Shayne Nelson, Group Chief Executive Officer said:
Patrick Sullivan, Group Chief Financial Officer said:
Financial Review
| AED billion | 9-month period ended | 9-month period ended | Better / (Worse) |
| 30-Sep-22 | 30-Sep-21 | (%) | |
| Net interest income | 15.5 | 12.6 | 23% |
| Non-funded income | 7.2 | 4.7 | 52% |
| Total income | 22.7 | 17.3 | 31% |
| Operating expenses | (6.4) | (5.7) | (12)% |
| Pre-impairment operating profit | 16.3 | 11.6 | 41% |
| Impairment allowances | (3.3) | (3.7) | 12% |
| Tax and others | (1.5) | (0.6) | (168)% |
| Profit after tax and before hyperinflation | 11.5 | 7.3 | 58% |
| Hyperinflation adjustment Tax and others | (2.4) | – | n/m |
| Net profit | 9.1 | 7.3 | 25% |
| Key Metrics | |||
| Cost to income ratio (%) | 28.2% | 33.1% | 490 bps |
| Net interest margin (%) | 3.10% | 2.51% | 59 bps |
| Cost of Risk (bps) | 90 | 106 | 16 bps |
| EPS (AED) | 1.38 | 1.08 | 0.30 |
| Return on Tangible Equity (%) | 16.4% | 13.2% | 320 bps |
| AED billion | |||
| as at 30-Sep-22 | as at 31-Dec-21 | Inc / (Dec) | |
| Total assets | 721 | 687 | 5% |
| Loans | 419 | 422 | (1)% |
| Deposits | 481 | 456 | 5% |
| Key Metrics | |||
| NPL Ratio (%) | 5.8% | 6.3% | (50) bps |
| Impaired Loan Coverage Ratio (%) | 142.6% | 127.5% | 1,510bps |
| Liquidity Coverage Ratio (%) | 152.2% | 177.6% | (2,540) bps |
| Capital Adequacy Ratio (%) | 18.5% | 18.3% | 20 bps |
| Tier 1 Ratio (%) | 17.4% | 17.2% | 20 bps |
| Common Equity Tier 1 Ratio | 15.5% | 15.1% | 40 bps |
Rounding differences may appear throughout the document
Operating Performance
Total income for 9M’22 was up 31% y-o-y to AED 22.7 billion. Net interest income was up 23% y-o-y on improved loan and deposit mix with higher rates feeding through to margins. Further CASA growth improved funding costs and the balance sheet is well positioned to continue benefiting from rate rises. Non-funded income was up 52% y-o-y from increased local and international card transactions, coupled with growth in FX & Derivative income.
Expenses remain well controlled and within guidance. Higher income enables accelerated investment in Advanced Analytics and the international network to drive future growth.
Impairment allowances in 9M’22 were substantially down 12% y-o-y reflecting higher recoveries and writebacks and the improving operating environment, with 90 bps cost of risk within guidance.
Balance Sheet Trends
Lending was stable in the first nine months of 2022 as solid loan growth for Corporate, Retail, Emirates Islamic and DenizBank offset strong Sovereign repayments.
Deposit mix improved in 9M’22 with AED 18 billion growth in CASA enabling the Group to benefit further from interest rate rises.
Liquidity remains strong with the Liquidity Coverage Ratio at 152.2% and the Advances to Deposits Ratio at 87.2%.
During the first nine months of 2022, the Non-Performing Loan ratio improved by 0.5% to 5.8% on significant writeback and recoveries whilst the Coverage ratio strengthened to 142.6%, demonstrating the Group’s continued prudent approach towards credit risk management.
As at 30 September 2022, the Group’s Common Equity Tier 1 ratio is 15.5%, Tier 1 ratio is 17.4% and Capital Adequacy ratio is 18.5%.
- continued its excellent performance with its highest ever nine-month revenue, strongest ever acquisition of loans and credit cards, and a record growth in balance sheet.
- capitalised its strategic partnership with major Government entities and Corporates by further offering digitized service platforms.
- delivered a strong performance with income growing 136% y-o-y in 9M’22 mainly due to higher net interest income from balance sheet positioning, hedges and an increase in banking book investment income.
- net profit jumped 31% to AED 1,054 million for 9M’22 on higher funded and non-funded income with a significant reduction in the cost of risk reflecting improved business sentiment.
- income up by AED 2.5 billion (52%) and Impairment allowances AED 0.5 billion lower on strong writebacks and recoveries helping offset AED 2.4 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 revised up its UAE GDP growth forecast for 2022 to 7.0% whilst revising down their 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.
Best Bank and Best Regional Bank Awards – Emirates NBD
- Emirates NBD has ranked as a Market Leader in Corporate Banking, ESG and Investment Banking categories and as Highly Regarded in the Digital Solutions category within Euromoney Market Leaders
- Emirates NBD ranked 2nd in Tier One Capital and 2nd by Total Assets by The Banker Top 100 Arab Bank Rankings 2022
- Emirates NBD won ‘Best Bank in the UAE’ by Global Finance World’s Best Banks 2022 Awards
- Emirates NBD won ‘Best Innovation in Retail Banking’, ‘Best Domestic Private Bank in the UAE’ and ‘Best Bancassurance Implementation’ by MEA Finance Awards 2022
- Emirates NBD won the ‘Best Foreign Bank in KSA’ and the ‘Best Credit Card in KSA’ award at the 2021 International Finance Awards
- Emirates NBD won Best AI Use-Case in the Private Sector for the Banking segment at the World AI Show & Awards
- Emirates NBD won ‘Best Use of Big Data in Customer Strategy’ at the Retail Banker International Asia Trailblazer Awards 2022
- Emirates NBD Private Banking won ‘Outstanding NRI/Global Indians Offering’ by Private Banker International Global Wealth Awards 2022
- Emirates NBD Capital won ‘Structured Finance Bank of the Year’, ‘Islamic Syndication House of the Year’ and 8 deal awards by Bonds, Loans & Sukuk Middle East Awards 2022, and ‘Saudi Arabia Deal of the Year’, ‘Hybrid Deal of the Year’, ‘Kuwait Deal of the Year’, ‘Sovereign & Multilateral Deal of the Year’ and ‘Turkey Deal of the Year’ by Islamic Finance News 2022 Awards
Marketing, Social Media and Customer Engagement Awards – Emirates NBD
- Emirates NBD was named the UAE’s most valuable banking brand and MENA’s third most valuable banking brand, with a value of USD 3.6 billion, in The Banker’s 2022 brand valuation
- Emirates NBD won ‘Excellence in Customer Service Innovation’ in the Strategy Awards category at the Digital CX Awards 2022 by The Digital Banker
Emirates Islamic
- Emirates Islamic was named ‘Best Islamic Bank in UAE’, ‘Best Islamic Bank for Customer Experience’ and ‘Best Credit Card in UAE’ for its Etihad Guest Credit Cards at the World Finance Islamic Finance Awards 2022
Emirates NBD has a leading retail banking franchise, with 885 branches and 4,113 ATMs / SDMs in the UAE and overseas. It is a major player in the UAE corporate and retail banking arena, and has strong Islamic banking, investment banking, private banking, asset management, global markets & treasury and brokerage operations. The bank has operations in the UAE, Egypt, India, Turkey, the Kingdom of Saudi Arabia, Singapore, the United Kingdom, Austria, Germany, Bahrain, Russia and representative offices in China and Indonesia. For more information, please visit: www.emiratesnbd.com
