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Emirates NBD’s Q3 2022 profit climbs 51% on higher income

REUTERS/Satish Kumar
Emirates NBD sold $500m in a 5-year bond issue in October 2022, which attracted more than $1bn in orders

Emirates NBD, Dubai’s biggest bank, reported on Thursday a 51 percent rise in net profit in the third quarter of 2022 on higher income, including net interest income and from transactions.

Emirates NBD made net profit of AED3.8 billion ($1.03 billion) in the quarter from AED2.5 billion in the third quarter of 2021.

EFG Hermes estimated net profit of AED3.14 billion.

In its corporate and institutional banking division, net profit was up one percent “on lower impairment allowances and higher fee income as increased equity capital market activity offset lower debt capital market volumes.”

Emirates NBD has won a lead spot on all state-led Dubai initial public offerings this year, boosting its fees and reviving a long-dormant business.

Net interest income surged 37 percent on an “improved loan & deposit mix” due to higher interest “feeding through to margins” and “strong new lending growth,” ENBD said.

Net interest margins rose to 3.57 percent in the quarter from 2.65 percent a year earlier and 3.09 percent in the second quarter.

Total assets rose one percent from the previous quarter to AED721 billion. Its non-performing loans ratio fell to 5.8 percent from 6.1 percent in the previous quarter. Liquidity coverage fell to a ratio of 152.2 percent from 154.8 percent in the second quarter.

ENBD, the UAE’s second-biggest lender behind First Abu Dhabi Bank, said its loss on net monetary position for its Turkish subsidiary DenizBank was AED2.4 billion in the first nine months of 2022.

Turkey and Egypt, where ENBD also has a unit, “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,” ENBD said.

“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 said in a statement.

It revised up its growth forecast for the UAE this year to seven percent and for 2023 revised down to 3.9 percent.

Rates are rising at a faster rate than ENBD previously anticipated, it said, as inflation remains at multi-decade highs in several countries.