Emirates NBD's fourth-quarter net profit surges 53% as economy continues to recover

The lender's net income in the three months to the end of December rose to $544m

Emirates NBD's net profit for the three months to the end of December climbed to Dh2bn. Reuters

Emirates NBD, Dubai's biggest lender by assets, reported a 53 per cent surge in fourth-quarter net profit on the back of higher net interest income and non-funded income as the UAE's economy continued to make a strong recovery from the coronavirus-induced slowdown.

Net profit for the three months to the end of December climbed to Dh2 billion ($544m), the lender said in a statement on Wednesday to the Dubai Financial Market, where its shares are traded. Net interest income during the period grew 7 per cent to Dh4.3bn, while non-funded income more than doubled to Dh2.2bn.

“Emirates NBD continued financing the real economy and was rewarded as economic growth rebounded, helped by government economic stimulus packages and the successful handling of the pandemic by the country’s wise and visionary leadership," Sheikh Ahmed bin Saeed, chairman of Emirates NBD, said.

The UAE introduced economic stimulus worth Dh388bn to offset the impact of the pandemic that tipped the world economy into its worst recession since the 1930s. That includes the central bank's Dh50bn Targeted Economic Support Scheme (Tess) to boost liquidity in the financial and banking sector.

Last month, the Central Bank of the UAE said it will extend support measures aimed at helping lenders mitigate the effects of the Covid-19 pandemic by six months until mid-2022 to back the country's continued economic recovery. Relief measures related to banks' capital buffers, liquidity and stable funding requirements will be extended until June 30 for all lenders operating in the UAE.

“The balance sheet remains rock solid with sound capital, liquidity and credit quality enabling the board to propose a substantial increase in dividend to 50 fils per share,” Shayne Nelson, group chief executive of Emirates NBD said.

The bank’s annual 2021 profit jumped 34 per cent to Dh9.3bn from the previous year, as non-funded income grew 21 per cent to Dh6.9bn and impairment allowances slid 26 per cent to Dh5.9bn. Operating expenses grew 2 per cent to Dh8bn.

Emirates NBD expects the UAE economy to continue to recover in 2022 accelerating to 4.6 per cent this year from an estimated 1.9 per cent in 2021 on the back of higher oil production. That's slightly higher than the central bank's estimates which put growth at 4.2 per cent this year, higher than the 3.8 per cent previously forecast for 2022.

The bank has operations in the UAE, Egypt, India, Turkey, Saudi Arabia, Singapore, the UK, Austria, Germany, Bahrain, Russia and representative offices in China and Indonesia.