Emirates NBD H1 net profits plunge 28%

First half net profits at Emirates NBD, one of the largest banks in the UAE, plunged 28 per cent to Dh1.5 billion compared with Dh2.1 billion in the corresponding period of last year, according to its statement posted on the Dubai Financial Market website.

However, the results look better when compared with H2 2009 net profits of Dh1.23 billion, an increase of 23 per cent.

The bank’s total H1 2010 income is down 11 per cent to Dh4.87 billion, and in line with the trend of rising impairments on non-performing loans, ENBD increased its impairment allowances by 8 per cent to Dh1.75 billion.

The bank’s NPL ratio stood at 2.88 per cent at H1 2010 compared with 2.36 per cent at the end of 2009.

Its earnings per share dropped down 28 per cent to Dh0.27 (H1 2009: 0.38), according to the statement.

ENBD’s H1 loan book shrunk by 5 per cent to Dh203.7 billion compared with Dh214.6 billion in the first half of 2009 while customer deposits increased 9 per cent to Dh197.6 billion from 181.2 billion in the same period.

The bank reined-in its expenses in the first half of this year, with costs in H1 2010 and Q2 2010 amounting to Dh1.58 billion and Dh711 million, respectively, a reduction of 13 per cent over H1 2009 and 20 per cent over Q2 2009 levels. 

The cost to income ratio declined marginally to 32.4 per cent in H1 2010 compared with 32.8 per cent in H1 2009.

The bank’s total capital adequacy ratio on a Basel II basis strengthened to 19.6 per cent in H1 2010 from 18.7 per cent at the end of 2009.

Its Tier 1 capital ratio also improved from 11.9 per cent at December 31, 2009, to 12.5 per cent at June 30, 2010.

“Whilst uncertainties and challenges remain in the global economic environment, we remain optimistic about the sustainability of the expected economic recovery both globally and regionally and our ability to capitalise on value-adding opportunities for our shareholders,” said Ahmed Humaid Al Tayer, Chairman of Emirates NBD.”

“We have continued to reduce operating expenses from ongoing rationalisation and our ability to leverage off the completion of the integration in 2009,” said Rick Pudner, the bank’s CEO.

“We have continued to invest in selected platforms for growth such as our private banking business and Abu Dhabi expansion and are well positioned to capitalise on expected improvements in economic activity,” he added.

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