Emirates NBD, the largest bank in the UAE, has showed a strong set of financial results with net profit reaching AED 5.1 billion; an increase by 58%.

Such results have enabled the Board of Directors to expect a growth in the 2014, dividend to 35 fils from 25 fils per share, according to a statement issued by the Bank.

The Bank’s total income soared by 22%, standing at AED 14.4 billion in 2014. Net interest income grew by 17%, posting AED 9.5 billion as asset growth was focused on higher margin retail and Islamic products, whilst the Bank’s liability profile improved thanks to current and saving account growth.

Meanwhile, non-interest income reached AED 4.9 billion, growing by 33%, supported by increased income from trade finance, foreign exchange and brokerage & asset management business, as well as gains from the sale of property and investments.

The Bank’s impaired loan ratio grew to 7.8% in 2014. Further provisioning of AED 5.0 billion helped boost the impaired loan coverage ratio to 100.3%, achieving the Bank’s target coverage level.

Total income for the year ended 31 December 2014 reached AED 14,442 million against AED 11,856 million in 2013, registering a growth by 22%. In addition, net interest income surged by 17% in 2014, posting AED 9,496 million.

Moreover, non-interest income jumped by 33% as it reached AED 4,946 million in 2014, backed by increases in trade finance and foreign exchange income, brokerage & asset management fees and gains from the sale of property and investments.

The Bank’s capital adequacy ratio grew by 1.5%, reaching 21.1% due to retained profits. Furthermore, the advances to deposit ratio improved by 4.3% to 95.2%.

The Bank’s statement showed that 2014 expenses reached AED 4,389 million, recording a growth by 5% over the previous year. Additionally, the cost to income ratio grew by 5% y-o-y to 30.4%. Excluding one-offs, the cost to income ratio would have been 31.3%.

During 2014 the impaired loan ratio rose to 7.8%. The 2014 impairment charge soared to AED 4,995 million. Such was driven by conservative provisioning on the corporate and Islamic financing portfolios, which enhanced the coverage ratio to 100.3%.

Meanwhile, the Group’s net profit posted AED 5,139 million in 2014, recording 58% above the profit posted for 2013.

The Bank’s deposits rose by 8%, and gross loans grew by 3% during 2014. Gross loans grew by 5%, excluding the write-off of fully provided for retail loans. The advances to deposits ratio surged by 4.3% in 2014, standing at 95.2% by the end of the year.

The Bank’s statement noted that “As at 31 December 2014, the Bank’s capital adequacy ratio and Tier 1 capital ratios were 21.1% and 18.0% respectively. The 2.7% improvement in the Tier 1 ratio recorded in 2014 is due to retained profit coupled with a $500 million Tier 1 issue.”

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