Emirates NBD on Thursday announced that its net profit for 2012 increased by three per cent to Dh2.6 billion compared with Dh2.5 billion in 2011, and up 281 per cent after excluding the Dh1.8 billion non-recurring gain on subsidiaries reported in 2011.
The bank said cash dividend of 25 per cent per share was declared for 2012, while the total income stood at Dh10.2 billion last year, up three per cent from 2011.
Total income for the year ended 31 December 2012 amounted to Dh10,212 million, an increase of three per cent compared with Dh9,930 million in 2011. Total income for Q4 2012 increased by one per cent from Q4 2011 to Dh 2,506 million.
Net interest income for the year ended 31 December 2012 declined by five per cent to Dh6,912 million from Dh7,258 million in 2011. On a quarterly basis, Q4 2012 net interest income of Dh1,766 million declined by eight per cent from Q4 2011.
The declining trends in net interest income were attributable to net interest margin compression in 2012 to 2.43 per cent from 2.69 per cent in the previous year resulting from lower loan spreads and the impact of increased wholesale debt funding.
Non-interest income recorded an improvement of 24 per cent to Dh3,300 million for 2012, driven principally by higher investment securities income and lower write-downs on investment properties. Excluding these impacts, core fee income improved by nine per cent resulting from increased banking fee income and a pickup in trade finance activity.
Costs for the year ended 31 December 2012 amounted to Dh3,669 million, an increase of five per cent over 2011 resulting from the consolidation of Dubai Bank costs from Q4 2011. Excluding the impact of Dubai Bank, operating costs improved by one per cent in 2012 due to cost optimisation initiatives.
Commenting on the group's performance, Sheikh Ahmed bin Saeed Al Maktoum, Chairman of Emirates NBD, said: "These financial results reflect a very positive operational performance and demonstrate the strength of Emirates NBD and its position as a leading bank in the region.
“Despite the challenges reflected in the broader global economic environment, the UAE and Dubai in particular have shown resilience and solid growth during the year and Emirates NBD is well-placed to continue to capitalise on this improving economic backdrop."
He added: "In light of the bank's successful performance in 2012, improving outlook, and in line with our commitment to shareholders, the bank has declared a cash dividend of 25 per cent per share for the 2012 financial year."
Emirates NBD's Chief Executive Officer, Rick Pudner, said: "During 2012, Emirates NBD has delivered a strong set of financial results with operating profits for the year up 82 per cent. The year has also witnessed successful execution towards our strategic imperatives, with highlights including the completion of the Dubai Bank integration, the progress made in our wholesale banking transformation program and the improving growth momentum in our retail and Islamic franchises. This strategic progress, in combination with our strong levels of capitalisation and liquidity, positions the bank to take advantage of growth opportunities in the future."
Emirates NBD's Chief Financial Officer Surya Subramanian said: "The bank has continued to deliver strong levels of operating profitability during 2012 with top-line growth supported by an improving underlying operating cost position and a gradually declining risk cost. The year has also seen a sustained focus on balance sheet optimisation resulting in strong growth in stable low-cost deposits and the issuance of almost Dh15 billion in medium term liabilities."
Follow Emirates 24|7 on Google News.