Dubai's Biggest Bank Boosts 2018 Profit 20%, Beats Estimates

(Bloomberg) -- Emirates NBD PJSC reported a better-than-expected increase in full-year profit as lending rose and loan loss charges fell at Dubai’s biggest bank.

The state-controlled lender recommended a dividend of 40 fils a share, unchanged from a year ago.

Highlights

  • FY net income 10.04 billion dirhams ($2.73 billion) vs 8.35 billion dirhams
    • Mean estimate 9.9 billion dirhams (range 9.57 billion - 10.2 billion; Bloomberg data)
  • Total income 17.4 billion dirhams vs 15.5 billion dirhams
    • Mean estimate 17.4 billion dirhams (range 17 billion dirhams - 17.6 billion dirhams)
  • Net interest income 12.9 billion dirhams vs 10.8 billion dirhams
  • Non-interest income 4.51 billion dirhams vs 4.67 billion dirhams
  • General & administrative expenses 5.62 billion dirhams 4.84 billion dirhams
  • Impairment allowances 1.75 billion dirhams vs 2.23 billion dirhams
  • Loans 327.9 billion dirhams vs 304.1 billion dirhams
  • Deposits 347.9 billion dirhams vs 326.5 billion dirhams
  • Net interest margin 2.82 percent vs 2.47 percent
  • Impaired loan ratio 5.9 percent vs 6.2 percent

"Margins widened 35 bps in 2018 as rate rises flowed through to the loan book which more than offset a rise in funding costs," Group Chief Executive Officer Shayne Nelson said. "The group’s balance sheet remains healthy with a further strengthening in capital coupled with strong liquidity and stable credit quality."

In Depth

  • Emirates NBD is the United Arab Emirates’ second-biggest bank with assets of $136 billion; top lender is First Abu Dhabi Bank
  • The bank agreed to buy Turkey’s Denizbank AS last year, for which it is now seeking regulatory approval
  • It is said to have held off from selling a dollar bond in November as interest rates climbed
  • The bank is rated A3 at Moody’s; A+ at Fitch. All have stable outlooks.
  • Click here for credit rating profile: EMIRATES UH Equity CRPR
  • Emirates NBD is the third big regional lender to report results after Qatar National Bank and Bank Muscat, both of which beat estimates for full-year earnings.
    • Qatar National Bank Profit Climbs 5% as Interest Income Climbs
    • Bank Muscat Full Year Net Income 1.3% Above Estimates

Dig Deeper

For financial statement, click here.

Read more

Shares

  • Emirates NBD shares dropped 2.1 percent at close in Dubai on Tuesday
  • Stock advanced 8.4 percent in the past 52 weeks. The Dubai Stock Index lost 29 percent.
  • The shares are down 1 percent in the past 5 days and rose 1.1 percent in the past 30 days.
  • Emirates NBD trades at 5.2 times its estimated earnings per share for the coming year.
  • The company’s dividend yield is 4.4 percent on a trailing 12-month basis and 4.4 percent based on Bloomberg Dividend Forecasts for the next 12 months.
  • The analyst consensus one-year price target for the company is AED14.78, for a potential return of 64 percent. Analysts raised the target by 6.7 percent in the past three months.
Dubai's Biggest Bank Boosts 2018 Profit 20%, Beats Estimates

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