Three-fold surge in impairment loss lands Emirates Islamic in AED482mn FY20 loss

BBN Report

DUBAI/January 27-2021: Emirates Islamic, the Islamic subsidiary of Emirates NBD, Dubai’s largest bank, closed the financial year 2020 (FY20) with a net loss of AED482 million against a net profit of AED1.06 billion, the bank reported a year earlier.

A 208 per cent jump in total net impairment loss to AED1.49 billion for FY20 from AED483 million a year ago, has literally landed the bank in a loss in 2020, a year which will be marked in the history for the challenges posed by COVID 19 pandemic.

A personal finance-heavy Islamic financial institution, Emirates Islamic, sits on AED27.83 billion portfolio of personal financing, which could be well over half of its total financing as of 2020 end.

The bank reported a total income of AED2.1 billion for the period under review. The balance sheet of the bank remains healthy with strong impairment coverage, liquidity and capital ratios.

The poor performance this time also can very well be attributed to a decline in non-funded income due to the slowdown in the economy and the impairment allowances engendered by the slowdown.

Assets growth

Total assets of the bank increased by 9 per cent to AED70.6 billion during 2020 from a year earlier. Financing and investing receivables at AED40.8 billion, increased by 9 per cent from end 2019.

Customer accounts at AED46.9 billion have increased by 3 per cent from the previous year.

Hesham Abdulla Al Qassim (seen in the picture), Chairman of Emirates Islamic, Vice Chairman and Managing Director of Emirate NBD said noted that as a result of the low profit rate environment coupled with a more challenging business environment due to the Covid-19 pandemic, Emirates Islamic reported a net loss of AED482 million for 2020.

“We continue to play a pivotal role in the growth of the Islamic banking sector in the UAE and supporting the vision of Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of UAE and Ruler of Dubai, to make Dubai the global capital of Islamic economy,” Al Qassim added.

Salah Mohammed Amin, Chief Executive Officer (CEO) of the bank said that with an increase in business activity in the last quarter of 2020, the bank has accelerated its sales momentum across our retail, business and wholesale segments.

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