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Emirates NBD UAE

RAROC profile and corporate credit pricing model derived from Pillar 3 disclosures.

Cost-to-income
30.5%
Operating efficiency
Effective tax rate
19.5%
Applied to RAROC numerator
Avg corporate PD
2.40%
Probability of default
Avg LGD unsecured
45.0%
Loss given default

How Emirates NBD prices corporate credit

Emirates NBD is a UAE-based bank with approximately EUR 264bn of corporate credit exposure (EAD) under the Standardised approach to credit risk capital. The numbers below come directly from Emirates NBD's most recent Pillar 3 CR6 regulatory filings and are used to model how this bank prices corporate credit facilities.

ParameterValueWhat it means
IRB approachStandardisedHow the bank computes risk-weighted assets
Cost-to-income ratio30.5%Operating cost share of net revenue
Effective tax rate19.5%Applied to RAROC numerator after EL and funding
Average corporate PD2.40%EAD-weighted probability of default
Avg LGD (unsecured)45.0%Loss share if borrower defaults, no collateral
Avg LGD (secured)25.0%Loss share with eligible collateral
Funding spread22bpBank's wholesale funding cost above risk-free
Corporate EADEUR 264bnTotal exposure at default to corporates

Sample RAROC calculation

On a representative BBB+ rated, 5-year term loan of EUR 25M at 150bp spread with a 20bp commitment fee, Emirates NBD would generate an estimated RAROC of 7.18% against a typical 12% bank hurdle rate. To hit that hurdle on this exact deal, the bank would need a minimum spread of 248bp. This deal is significantly below target — the bank would either reprice it or decline.

ComponentValue
Annual revenue (spread + fees)EUR 385,000
Operating costEUR 154,000
Expected loss (PD × LGD × EAD)EUR 28,750
Capital required (FPE)EUR 2,451,320
RAROC (after tax)7.18%
Min spread to hit 12% RAROC248bp

How Emirates NBD compares to peers

Out of 59 banks in the OpenRAROC dataset, Emirates NBD ranks #38 by RAROC on this sample deal.

RankBankCountryRAROCMin spread
1Qatar National BankQatar9.00%203bp
2DBS GroupSingapore8.18%224bp
3JP MorganUnited States8.12%231bp
4ICBCChina8.06%233bp
5China Construction BankChina8.06%233bp
37BNP ParibasFrance7.19%257bp
38Emirates NBDUAE7.18%248bp
39ABN AMRONetherlands7.11%259bp
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Data source

Emirates NBD Basel III Pillar 3 Disclosures Q4 2025 (31 Dec 2025); FY2025 Financial Results Press Release (Jan 2026)

Standardised Approach for Credit, Market and Operational Risk per CBUAE. C/I 30.5%. Tax rate 19.5% reflects UAE 9% corporate tax + Pillar Two DMTT top-up to 15% effective rate. Corporate EAD AED 264bn from Pillar 3 CR4/CR5 (post-CCF/CRM: on-balance 199.5bn + off-balance 64.8bn). Corporate RWA density 96%. NPL ratio 2.4% used as PD proxy. Coverage 161% on defaulted loans (AED 25.2bn provisions vs AED 15.6bn defaults). Gross loans AED 658bn, total assets AED 1,164bn. LGD unsecured 45% (Basel SA standard), secured 25%. Funding spread 22bp based on senior unsecured 65-80bp over UST minus UAE sovereign spread. CET1 14.7%. Total eligible collateral AED 78.3bn. Profit before tax AED 29.8bn, net profit AED 24bn.

Confidence: high · Read the full RAROC methodology

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