Dubai’s biggest bank Emirates NBD is set to distribute 40 percent cash dividend to shareholders even after its net profit slumped by more than half in 2020.

In its general assembly, the bank approved the payout at 40 fils per share, aggregating to an amount of 2.5 billion dirhams ($680 million).

Full-year net profit plunged 52 percent to 7 billion dirhams in 2020, compared with 14.5 billion dirhams in 2019.

The lower profit is on the back of higher provisions and after the gains made from the listing of Network International was not repeated in 2020.  Excluding the Network International gain in 2019, the bank said its net profit was down 31 percent year-on-year.

Sheikh Ahmed Bin Saeed Al Maktoum, Emirates NBD chairman, noted that 2020 was indeed “an unprecedented year”, but that the government acted timely to protect public health and managed to re-open the economy with measured guidelines.

He said the bank’s significant investment in digital and technology over the last few years also allowed the lender to “seamlessly adjust” to the change in customer banking behaviour last year.

“We aim to continue to pioneer strategic initiatives that deliver superior products and services, while increasing shareholder value,” he said.

Banks in the country were hit hard after the government imposed the coronavirus lockdown in March last year. The country’s gross domestic product (GDP) is expected to recover this year after falling sharply in 2020, but the pandemic shock will continue to reverberate through the economy and banking sector, according to S&P.

(Writing by Cleofe Maceda; editing by Seban Scaria)

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© ZAWYA 2021