Emirates NBD's full-year income rises 4% to Dh23.2bn

Dubai's largest lender is recommending a cash dividend of 40 fils per share

Dubai's biggest lender by assets reported a 4% rise in total income in 2020 on loan growth and contributions from Denizbank. Pawan Singh / The National 

Emirates NBD, Dubai's biggest lender by assets, reported a four per cent rise in total income in 2020 on loan growth, including contributions from Denizbank.

Total income reached Dh23.2 billion in the 12 months ending December 31 from the year earlier, Emirates NBD said in a filing to the Dubai Financial Market on Wednesday.

The bank is recommending a cash dividend of 40 fils per share.

"Emirates NBD’s strong balance sheet, coupled with the ongoing ability to generate operating profit, enabled the bank to successfully deal with the unforeseen challenges in 2020," Hesham Abdulla Al Qassim, vice chairman and managing director of Emirates NBD, said.

Net profit for the year fell 52 per cent on higher provisions for bad loans and in the absence of the non-recurring gain from the sale of Network International shares in 2019.

Net profit fell to Dh7bn amid a "challenging operating environment," the bank said. Excluding the Network International gain in 2019, net profit was down 31 per cent year-on-year.

"Emirates NBD delivered a net profit ... despite the global pandemic that caused major disruption to individuals, communities and businesses," Sheikh Ahmed Bin Saeed Al Maktoum, chairman of Emirates NBD, said.

Banks globally have reported falling profits and higher provisions in the wake of the pandemic, which disrupted global trade and slowed economic activity as countries implemented lockdowns to contain the coronavirus.

Emirates NBD's impairment allowances increased 65 per cent to Dh7.9bn from a year earlier, reflecting a softer credit environment from the impact of the Covid-19 pandemic.

Net interest income increased by 8 per cent year-on-year to Dh17.5bn as the contribution from DenizBank more than offset a decline in margins due to lower interest rates, the bank said.

The net interest margin reached 2.65 per cent in 2020, compared to 2.89 per cent a year earlier.

The cost to income ratio last year reached 33.8 per cent compared with 32.1 per cent in 2019. The bank's total assets grew 2 per cent to Dh698bn.