It was the kind of year when solidity and stability mattered above all else, and Emirates NBD had both of those in spades. Under group chief executive Shayne Nelson, the Dubai-based lender is in pole position to benefit from a post-pandemic recovery, as a region of resource-rich nations, governed by ambitious leaders, seeks to diversify away from oil and gas.
Net profit fell to Dh7 billion ($1.91 billion) in 2020, as Covid hit, but total income rose 4% year on year to Dh23.2 billion, as a positive contribution from Turkey’s DenizBank, now controlled by Emirates NBD, offset by losses from lower interest rates and non-funded income. Total assets rose 2% on an annualized basis, to Dh698 billion, with customer deposits virtually flat at just over Dh464 billion. Non-performing loans ticked up very slightly, but not enough to concern a conservatively run and highly capitalized lender with a common equity tier-1 ratio of 15% at the end of 2020.
This year already offers a glimpse into a better future, with the banking group posting a profit of Dh2.32 billion in the first quarter, up 12% year on year and up 76% over the previous three months, supported by lower provisions and costs, and higher income. Total income from retail banking and wealth management was Dh7.76 billion in 2020.
Crises tend to bring out the best or worst in financial institutions, and the bank stood up to be counted. Emirates NBD’s global reach matters at moments like this. Its operations in Europe and Asia, in Saudi Arabia (where is has six branches), and the UAE, where it controls 20.2% of all bank sector deposits and 17.9% of total assets, enable it to act as a full-service financial firm wherever it goes.
It isn’t the best digital bank, but it is focused and innovative. During the awards period it rolled out voice banking to retail customers (courtesy of Amazon’s Alexa) and unveiled a new credit card tied to Liv, its pure-play digital bank. The card will be launched in Saudi Arabia later this year. Its corporate and institutional banking division reckons that more than 70% of companies actively use its two main digital platforms, smartBUSINESS and smartTRADE.
Elsewhere, the bank delivered upgrades to its mobile banking app and a digital ID feature that lets customers verify their credentials using contactless near field communication technology. Emirates NBD reckons 77% of retail customers now use its mobile or web banking services each month.
Its capital markets team kept themselves busy, completing 55 capital markets transactions worth $44 billion in 2020 and 25 deals worth $18 billion in the first quarter of 2021. The deal list includes a $1.75 billion bond for Galaxy Pipeline Assets, a £500 million sukuk for the UK sovereign and a $200 million sukuk for the Republic of the Maldives. It also became the first lender in the Middle East to issue an environmental, social and governance (ESG) criteria-linked syndicated loan, raising $1.75 billion.
