Emirates NBD's solid first-quarter results allow it to increase the speed of digital and foreign network investment to sustain potential development. Because of its stability and high capital, it can retain conservative standards of collateral damage coverage. Emirates NBD's solid balance sheet and reserves allow it to assist its consumers and clients. We are honored to be the first Gulf Region bank to issue a USD 1.75 billion ESG-linked syndicated loan.

Key Highlights – First Quarter 2021

> Strong operational results in the context of improving economic conditions, with efficient cost control

· Total income increased by 25% year on year to AED 6.2 billion, owing to a significant recovery in non-funded income and higher net interest income as NIMs effectively absorbed the historic 2020 rate cuts.

· Expenses fell 9 % year on year and year on quarter to AED 1.9 billion because of the strong cost control discipline.

· Following constructive provisioning in previous years, impairment allowances decreased by 31% year on year, with a significantly lower net cost of risk of 158 basis points.

· Net profit increased 12 % year on year and 76 percent quarter on quarter to AED 2.3 billion due to better economic conditions, with DenizBank bringing substantial diversity to the Group.

· Net interest margin enhanced to 2.46 % because of reduced financing cost from high CASA development, mitigating NIM reduction in DenizBank following rate increases in Q4 2020 and Q1 2021.

> The Group's strong capital and liquidity, along with a stable deposit mix and higher earnings, enable it to continue to serve consumers and clients.

· Total assets remained stable in the first quarter at AED 695 billion, indicating a solid asset base.

· Customer loans totaled AED 436 billion, with personal loans, car loans, and mortgages in high demand.

· CASA increased by AED 16 billion to 56 % of overall deposits, improving the deposit mix even further.

· Credit Quality: The NPL ratio decreased by 0.1 % to 6.1 % while the Coverage ratio increased to 125.1 %, representing our conservative approach to credit impairment.

· Capital and liquidity: a Liquidity Coverage Level of 165.1 % and a Common Equity Tier-1 ratio of 15.6 % represent the Group's key capabilities, allowing it to serve clients and the community.

> Through a variety of creative digital platforms, Emirates NBD continues to serve customers and facilitate banking. The Group's progressive strategy can be seen in its international growth and ESG measures.

· Customer forbearance repayments: Over 110,000 consumers received AED 10.3 billion in assistance.

· Customer Repayments: AED 5.5 billion in repayments reflect the Group's performance in mitigating the financial burden of Covid-19 on consumers.

· Emirates NBD Capital rose more than USD 18 billion for 24 clients in 12 countries through investment banking.

· Emirates NBD was the first Gulf bank to issue an ESG-linked syndicated loan. The USD 1.75 billion facility's expense is determined by the number of women in managerial positions and water quality.

· The Group maintained its environmental and social programs, including renewable and social banking offerings and financial donations to the local community.

· Social accountability: About 60% of UAE subsidiaries currently have disability-friendly access, and over 1,500 staff has been certified in sign language and accessibility manners.

· DenizBank: Raised USD 435 million to finance in a multi-tenor and multi-currency ‘Diversified Payment Rights' exchange, drawing a diverse group of foreign investors.

· Payments made with Apple Pay, Samsung Pay, and Google Pay more than doubled in 2020, and the momentum in contactless payments is anticipated to remain in Q1 2021.

· Increased the number of branches in Saudi Arabia to six, becoming the first international bank to be approved to open branches in Madinah and Makkah.

Hesham Abdulla Al Qassim, Vice Chairman, and Managing Director said:

· “Emirates NBD's Q1 profit increased by 12 % year on year to AED 2.3 billion, reflecting the stability and steady economic growth.

· We recently released our 2020 Corporate Social Responsibility update, which highlights the Group's accomplishments and contribution to environmental and social issues.

· Emirates NBD will observe the 'Year of the 50th' with a series of activities will honor the UAE's accomplishments over the last 50 years and encourage the nation's youth to grow their goal for the next 50 years of ingenuity and creativity.”

Shayne Nelson, Group Chief Executive Officer said:

· “I am proud of how our colleagues at Emirates NBD have concentrated on serving consumers and clients, resulting in a 12% increase in profitability year on year and a 76 % increase quarter on quarter.

· These strong first-quarter results allow us to increase our investment in digital and our international network to support future development.

· Emirates NBD extended its branches in the Kingdom of Saudi Arabia in Q1-21 by opening new branches in Madinah and Makkah.

· Emirates NBD released a USD 1,750 million ESG-linked syndicated loan in March 2021, with pricing tied to more changes in water use and the proportion of women in senior management. This is the first loan of its kind provided by a bank in the Gulf region.

· Economic performance is forecast to increase this year in all of the Group's operating countries.

· As users accept touch-free technologies, contactless payments currently account for 84 % of Emirates NBD's face-to-face payment transactions. Payments made with mobile wallets such as Apple Pay, Samsung Pay, and Google Pay should double by 2020.”

Patrick Sullivan, Group Chief Financial Officer said:

· Emirates NBD reported a 12% growth in profit year on year to AED 2.3 billion, with the substantial effect of lower interest rates more than offset by slightly lower credit impairment and strong cost control. Profit increased by 76 % year on year, reflecting a strong recovery in non-funded profits, especially in our Turkish unit, DenizBank.

· Because of Emirates NBD's solid balance sheet and liquidity, we will continue to assist consumers and clients when they rebound from the global pandemic. Because of our performance and solid reserves, we can retain extremely conservative standards of collateral impairment coverage, placing us in a very strong position.

Operating Performance

Overall income for the first quarter of 2021 was AED 6,163 million, a 25% improvement over the previous quarter's total income of AED 4,934 million.

Net interest revenue rose by 1% from the previous year, while net interest margin increased by 4 basis points. Non-funded revenue grew by 133% quarter over quarter due to higher contributions from all parties and by 6% year over year due to increased commission and investment securities income. Expenses for the first quarter of 2021 totaled AED 1,868 million, a 9 % increase over the previous quarter and year on year, as earlier cost-cutting measures took effect. At 30.3 %, the cost-to-income ratio stands well below management's target range.

Impairment allowances of AED 1,763 million were lowered by 31% year on year in Q1-21 because of constructive providing in previous quarters. The Group's net profit of AED 2,322 million for the first quarter is up 12% year on year and 76% quarter on quarter.

Balance Sheet Trends

Loans were decreased by 2% in Q1-21 due to corporate loan repayments, including TESS-supported loans, and the effect of currency translation on DenizBank's loan portfolio. Deposits were reduced by 1% because of the Turkish lira's weakening. The deposit composition is improving, with CASA deposits increasing by AED 16 billion. The Liquidity Coverage Ratio is now at 165.1 %, and the Advances to Deposits Ratio is at 95 % The Group received AED 15.4 billion in senior term financing during the first quarter of 2021, including the first ESG-linked syndicated loan from a Gulf bank. After 2014, DenizBank has released the first Diversified Payment Rights deal.

The Non-Performing Loan ratio rose to 6.1 % during the period while the Coverage ratio increased to 125.1 %, reflecting the Group's continued conservative approach to credit risk management. The Group's Common Equity Tier 1 ratio is 15.6 %, Tier 1 ratio is 17.9 %, and Capital Adequacy ratio is 19.0 % as of March 31, 2021.

Business Performance

· Both company divisions delivered higher earnings.

· Retail Banking and Wealth Management (RBWM) increased CASA balances by 5% during the year, owing to strong acquisitions and consumer campaigns.

· New credit card purchases and spending have recovered to pre-Covid 19 peaks.

· More than three-quarters of RBWM customers are now online.

· Liv. Increased its client base in the UAE to over 450,000 people and extended with the introduction of Liv. Prime, a membership-based service that provides luxury lifestyle benefits.

· Corporate and Institutional Banking (C&IB) saw a significant increase in consumer adoption of its next-generation digital corporate banking network, ‘business online.'

· C&IB continued to provide interest and principal deferral relief to consumers in all primary industries for up to six months, assisting in mitigating the financial impact of Covid-19.

· Emirates NBD Capital (‘EmCap') led 24 transactions totaling more than USD 18 billion for sovereign, financial institution, and corporate clients from 12 different countries. EmCap strengthened its ESG credentials by guiding five ESG-related transactions.

· Global Markets and Treasury (GM&T) Sales and Trading provided a good result in Q1-21, with trading profits by 60% over the previous year, supported by increased contributions from both the Credit and Rates trading departments.

· Emirates Islamic increased its wealth management product offering, while its corporate credit card grew rapidly.

· DenizBank's net revenue of AED 2,039 million accounts for 33% of the Group's total profits. DenizBank contributed AED 642 million or 28% of Group net profit, and its reserves of AED 126 billion account for 18% of total Group assets.

· Saudi Arabia: Emirates NBD is the first international bank to open branches in Madinah and Makkah, bringing the total number of branches to six.

· Egypt: Successful campaigns increased auto loan market share and increased penetration of digital banking.

Outlook

The world economy is showing signs of recovery as Covid-19 vaccine plans are implemented. The UAE has distributed more than 90 vaccinations per 100 citizens, the world's second-highest vaccination rate. According to Emirates NBD Research, the non-oil economy will expand by 3.5 % in 2021, while oil production curbs will weigh on headline GDP growth, which is estimated to be 1.4 % this year.

Turkey and Egypt reported positive GDP growth in 2020, and the market expects both to rise faster this year. The recent uptick in coronavirus outbreaks in Turkey remains a major danger to the summer tourism period.

The economy of the Kingdom of Saudi Arabia is forecast to expand by 0.7 % this year after contracting by 4.1 % in 2020. With prolonged oil production cuts weighing on GDP expansion, the non-oil sector is projected to rise 4.0 % in 2021. Higher oil prices would help to cut the budget deficit to 1.4 % of GDP this year, and a series of measures to increase domestic spending has been reported.