International Finance

Emirates NBD’s Network stake sale to boost profits

The bank will sell an additional 10.5 percent stake in Network International

Emirates NBD’s decision to sell an additional stake in Network International could boost the bank’s profits as well as captialisation, according to credit rating agency Moody’s.

“Emirates NBD’s latest 10.5 percent stake sale in Network International is credit positive because the realised gains will increase its 2019 profitability and capitalisation, providing an additional buffer to absorb the sizeable capital consumption from its acquisition of Turkey-based Denizbank completed on July 31,” Analyst at Moody’s, Mik Kabeya told the media.

He added, “We estimate that Emirates NBD’s realised gains from the Network International transaction will be around Dh998.8 million, which equates to around 10 percent of its 2018 profit or 0.2 percent of tangible assets at the end of 2018.”

In April, the Emirates NBD sold a 28.6 percent stake in Network International. Prior to this stake sale, Emirates NBD owned a 51 percent stake in the digital payments company.

Emirates NBD, which is Dubai’s biggest bank, will soon roll out voice banking by collaborating with Amazon Web Services. The bank’s customers will be able to ask their Amazon Alexa devices for banking updates such as account balances.

Emirates NBD will use Amazon Web Services’ artificial intelligence, cloud computing services, and other technologies to improve customer engagement and simplifying banking.

This could be a significant step for the bank’s digitalisation push. In 2017, the bank announced that it will spend around Dh1 billion in the next three years on digitalisation.

Earlier this month, the bank also raised the cap on foreign ownership from 5 percent to 20 percent to attract more investors. The bank plans to further raise the cap after seeking approval from its shareholders.

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