Emirates Bank Group announces its third quarter 2005 results

This represents an increase of 96.2 per cent over the AED 587 million (US$ 160 million) earned in the same period in 2004. Earnings per share increased to AED 1.61 (US$ 0.44) compared to AED 0.82 (US$ 0.22) for the same period last year.

Total assets of the Group were AED 48.9 billion (US$ 13.3 billion) at 30 September 2005 an increase of AED 12 billion (US$ 3.2 billion) or 32% over 30 September 2004.

Loans and advances to customers were higher at AED 34.2 billion (US$ 9.3 billion) at 30 September 2005 from AED 28.4 billion (US$7.7 billion) at 30 September 2004.

Customer deposits increased to AED 26.6 billion (US$ 7.2 billion) at 30 September 2005 from AED 20.3 billion (US$ 5.5 billion) at 30 September 2004.

The bank's investment portfolio totaled AED 4.5 billion (US$ 1.2 billion) at 30 September 2005, an increase from AED 1.3 billion (US$ 360 million) at 30 September 2004.

Emirates Bank Group Chairman, His Excellency Ahmed Humaid Al Tayer, said: "Emirates Bank Group continues to deliver a record performance in 2005. Operating revenues have strongly outperformed 2004. Despite ongoing investment in technology, staff and product development, the bank's cost to income ratio remains well within expected range. Customer deposits have continued to grow and good macro-economic conditions have fuelled strong customer asset growth. Asset quality remains sound, with a relatively low level of provisions for credit losses."

"Business growth in the UAE remains strong and banking sector revenues have benefited from strong investor participation in a buoyant stock market. In addition, the Group's profit increase is underscored by strong growth in all our core activities and we maintain a close focus on the fundamentals of our business in order to ensure a balanced earnings and growth momentum," he added.

New business initiatives are beginning to pay off during 2005. Within a year of commencing operations, Emirates Islamic Bank has achieved a customer deposit base of AED 2.8 billion and Islamic Financing and Investment Products grew to AED 1.6 billion as at 30 September 2005.

The Group's Treasury activity has increased in the local and regional markets with greater sales of structured products to meet the increasingly sophisticated demands of corporate customers.

Retail Banking delivered strong growth in customer loans and deposits and continues to gain market share. During the third quarter the Bank opened 2 new branches and added 11 automated teller machines. The business further strengthened its product capability by investing in technology and people to better serve the growing customer base.

Emirates Financial Services PJSC continues to grow and assets under management increased by 132% during the year with a year on year growth in profit of over 200%. The company successfully launched two new funds during 2005 an "IPO Opportunities Portfolio Fund" and a "Market Making Portfolio Fund" in addition to creating a dedicated IPO Centre at the company to manage and administer IPO activities for the Group.

Network International LLC received accreditation from Visa International as being the first authorized EMV personalization center issuer in the region in 2005. Network International now carries out card processing services for 24 banks in the Middle East. The merchant acquiring business of the company shows rapid gains in the market.

Emirates International Brokerage LLC performed strongly as it responded to the needs of the customers and markets in the buoyant stock market. The Brokerage firm is ranked amongst the top three brokers in terms of the value of trades processed on the Dubai Financial Markets for the month of September. The business will shortly be launching an on-line brokerage service.

Emirates Bank Group continues to allocate capital to high growth and high return opportunities. The Group's strategy over the last few years of increased diversification of banking related activity, changing asset mix, growing recurring income and improving asset quality continues to pay off and is now reflected in the strong growth in core activity across all business lines.

During the third quarter of 2005, Standard & Poor's rated the Bank as A/Stable/A-1, acknowledging the Bank's solid capitalization, satisfactory profitability and strong market position in the United Arab Emirates. Emirates Bank was already rated A1/P1 by Moody's and A/F1 by Fitch.

As for the future outlook for the Group, there has been a good business momentum, and the Group is well positioned to develop new products in response to the needs of customers in an environment where there are expectations for strong growth and rapid change. The Emirates Bank Group appreciates the continuing support of its customers and the sustained effort of its staff in delivering these excellent results.