Emirates NBD's third-quarter profit surges 51% on higher revenue and net interest income

Dubai's largest bank registered a 37% rise in income from higher borrowing costs, which hit $1.67bn

Emirates NBD registered strong momentum in the first nine months of 2022, with profit growing by 25 per cent. Reuters.

Emirates NBD, Dubai's biggest lender by assets, reported a 51 per cent surge in third-quarter net profit on higher revenue and lower provisioning, while net interest income soared.

Net profit for the three months to the end of September climbed to about Dh3.8 billion ($1.03bn), the lender said in a statement on Thursday to the Dubai Financial Market, where its shares are traded.

The results beat the estimates of EFG Hermes and analysts polled by Bloomberg.

Net interest income surged 37 per cent to more than Dh6bn ($1.67bn) in the three-month period, compared with the same period a year earlier.

Emirates NBD's total operating income before impairments for the July-September period climbed 62 per cent to Dh6.8bn, compared with the same period last year.

“Emirates NBD delivered strong results … on increased transaction volumes and higher margins from an efficient funding base and higher interest rates,” said group chief executive Shayne Nelson.

“These strong results, healthy profitability and positive economic outlook for the region enable us to accelerate our investment for future growth.”

Mena economies are set to expand at their fastest pace since 2016, with oil-exporting countries in the region benefitting from high hydrocarbon prices, according to the World Bank.

GCC economies are projected to grow 6.9 per cent in 2022, driven by high oil prices, as well as higher growth rates in non-oil sectors, the lender said in a report earlier this month.

Developing oil exporters are forecast to grow at lower levels, expanding at 4.1 per cent this year and slowing to 2.7 per cent in 2023.

Emirates NBD's net profit for the first nine months of the year climbed 25 per cent on an annual basis to Dh9.1bn, as net interest income soared 23 per cent to more than Dh15.5bn from the same period a year earlier.

Provisions for loan losses during the nine-month period fell 12 per cent, year on year, to Dh3.3bn.

International operations provided diversification and growth opportunities, contributing 40 per cent of total income, while new lending increased substantially in both the retail and corporate segments, the bank said.

Liquidity in the UAE banking sector remains healthy, buttressed by high oil prices, said Patrick Sullivan, Emirates NBD's group chief financial officer.

In 2022, the bank grew the current account and savings account deposits by Dh18bn, despite rising interest rates, enabling the group to benefit from interest rate increases, Mr Sullivan said.

“We expect to finish the year with margins at the top end of guidance and cost of risk within guidance,” he said.

“The diversified balance sheet, solid capital base and strong operating profitability are core strengths of the group.”