Emirates NBD Declares Full Year 2020 Results


Emirates NBD (DFM: EmiratesNBD), a leading banking group in the region, delivered a net profit of AED 7.0 billion in 2020 despite a challenging operating environment. Total income increased 4% y-o-y as the positive contribution from DenizBank helped offset a decline in net interest margin due to lower interest rates and a reduction in non-funded income.  

Emirates NBD provided support to over 103,000 customers in the UAE, and provided assistance to many customers in the other geographies in which the Bank operates. Emirates NBD further enhanced its digital products and services as an increasing number of customers embraced this secure and convenient way of banking. The Group’s balance sheet remains healthy with strong capital, liquidity and impaired loan coverage ratios. These results have enabled the Board of Directors to recommend a 2020 dividend of 40 fils per share. 

Financial Highlights – FY 2020 

  • Total income of AED 23.2 billion improved 4% y-o-y on loan growth, including DenizBank 
  • Net profit of AED 7 billion declined 52% y-o-y on higher provisions and gain from sale of Network International shares not repeated in 2020. Excluding the Network International gain in 2019, net profit was down 31% y-o-y 
  • Impairment allowances increased to AED 7.9 billion reflecting weaker credit environment impact of Covid-19 with net cost of risk at 163 bps 
  • Net interest margin declined 24 bps y-o-y to 2.65% following cuts in base interest rates in the first half of 2020 
  • Total assets at AED 698 billion, up 2% from 2019 
  • Customer loans at AED 444 billion, up 1% from 2019 
  • Customer deposits at AED 464 billion, down 2% from 2019 
  • Non-performing loan ratio increased 0.6% to 6.2% in 2020 and coverage ratio remained strong at 117.3% 
  • Liquidity coverage ratio of 165% and advances to deposit ratio of 95.6% demonstrate a healthy liquidity position 
  • Common equity tier 1 ratio of 15.0% 
Commenting on the Bank’s performance, His Highness Sheikh Ahmed Bin Saeed Al Maktoum, Chairman, Emirates NBD said“Emirates NBD delivered a net profit of AED 7 billion in 2020 despite the global pandemic that caused major disruption to individuals, communities and businesses. The swift and decisive action of the UAE’s wise leadership in protecting the health of residents with clear and measured guidelines allowed the UAE economy to successfully reopen in the second half of the year. The Central Bank of the UAE’s Targeted Economic Support Scheme has been instrumental in helping customers and banks through these challenging times. I am proud that Emirates NBD played its part in supporting customers and the economy by providing financial assistance as well as actively participating in community initiatives. We continue to support the economy of the UAE as it proudly celebrates its golden jubilee in 2021 and we are excited to play an important role in the UAE’s further development over the next fifty years. As the official banking partner of Expo 2020 Dubai, we look forward to helping showcase the UAE’s innovative, tolerant and proud culture as we welcome the world to the UAE. In light of the Bank’s performance, we are proposing a cash dividend at 40 fils per share.” 

Commenting on the Bank’s performance, Shayne Nelson, Group Chief Executive Officer said, “Emirates NBD delivered a 1% improvement in pre-impairment operating profit in 2020 despite a challenging operating environment. Net interest income increased by 8% during the year as the contribution from DenizBank more than offset a decline in margins due to lower interest rates. Operating profit was 29% lower mainly due to lower interest rates & transaction volumes, coupled with higher impairment allowances. Emirates NBD’s resilient operating performance, coupled with a solid balance sheet will provide a platform for customers to take advantage of growth opportunities in the year ahead. Customer banking preferences changed during 2020 as an increasing number of both retail and corporate customers embraced digital banking. Emirates NBD’s significant investment in digital and technology over the last four years allowed the Bank to seamlessly adjust to this change in customer banking behaviour. We have provided interest and principal deferral support to over 103,000 customers in the UAE. Many other customers have benefited through waiver of fees and other support, both within the UAE and in the other geographies we operate in. The safety and well-being of our customers and employees remains our top priority. Following a challenging 2020, the expectation for economic growth in the countries that we operate in is more optimistic.” 
The Group’s net profit of AED 6,965 million in 2020 is 52% lower than in 2019. The decline in net profit was driven by higher provisions and no repeat of the gain on disposal of Network International shares in 2019.  Net profit was down 31% excluding the Network International gain in 2019.  

Loans increased by 1% during 2020 while Deposits were down 2% mainly due to a lower AED contribution from DenizBank. Liquidity remains strong with the Liquidity Coverage ratio at 165% as at 31 December 2020 and the Advances to Deposits Ratio at 95.6%. During 2020, the Group raised AED 18.4 billion of senior term funding in seven currencies including three benchmark senior public bond & sukuk issues and private placements with maturities out to 30 years. 

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