Dubai’s largest bank Emirates NBD has reported a net profit of AED5.6bn in the first nine months of 2020 amid increasing bad debt charges in challenging market conditions.

Performance highlights

Net profit plunged 55% on a year-on-year basis, driven by higher provisions.

However, net interest income surged 21% while non-funded income rose 9% with the full year inclusion of DenizBank.

Loan growth led to an 18% increase in total income to AED18.bn.

Net interest margin dropped 9 basis points to 2.73%.

Assets totalled AED692bn, a 1% rise from the end of 2019.

Customer loans and deposits totalled AED442bn and AED458bn, respectively.

Liquidity coverage ratio was 161.7%, while common equity tier 1 ratio stood at 15.6%.

Emirates NBD group CFO Patrick Sullivan said: “The operating profit of AED 6.1 billion in the first nine months of 2020 was resilient given the challenging operating environment.

“Net interest income declined throughout 2020 due to lower interest rates but non-funded income improved in the third quarter of 2020 as volumes picked-up following the acute disruption in Q2 2020.

“The cost-to-income ratio was brought back within guidance following earlier management actions in response to lower income. Excluding last year’s gain on disposal of Network International shares, net profit declined 30% as higher income from the inclusion of DenizBank was more than offset by additional credit impairment provisions as the Group boosted Stage 1 and 2 coverage ratios.”