NBAD posts Dh1.32 billion profit

The bank's third quarter revenues stood at Dh2.684 billion, underlying the bank's continuing strength in retail and global wholesale flow products. - File photo

National Bank of Abu Dhabi (NBAD) has reported net profits of Dh1.320 billion for the third quarter of 2016, while cumulative profits in 2016 for first nine months stood at Dh3.967 billion.
The bank's third quarter revenues stood at Dh2.684 billion, underlying the banks continuing strength in retail and global wholesale flow products. During the period, strong underlying growth trends and solid investment income were offset by a seasonal slowdown and ongoing challenging market conditions. Net profits were down five per cent year-on-year due to lower investment gains and higher impairment charges, despite growth in strategic businesses and overall stronger operating profits.
Expenses were down two per cent year-on-year; and down one per cent quarter-over-quarter in the third quarter of 2016 as the bank continues to tightly control expenses whilst also investing in talent, operations and infrastructure.
Loans were Dh205 billion, up one per cent sequentially and down three per cent year-on-year. Lending growth in the third quarter of the year was led by global wholesale, while retail lending grew both quarter-over-quarter and year-on-year.
Nasser Alsowaidi, chairman of NBAD, said: "NBAD continues to perform well, with strong underlying growth and disciplined cost management being two highlights this quarter. As we progress towards our merger with FGB, it is vital that we maintain stability of funding and consistent growth of the core business, which I am confident we will achieve. Our merger with FGB is progressing well. A new leadership team has been appointed for the combined bank, and we are beginning to put in place the strategy which will ensure continued growth and enhanced value for all of NBAD's stakeholders going forward."
Abhijit Choudhury, acting group chief executive, added: "We delivered a solid set of results in the third quarter reflecting continued underlying strength in our core businesses. We achieved this performance during a period of seasonal slowdown and ongoing challenging market conditions, whilst we continued to maintain expense discipline along with strong capital and liquidity positions. In global wholesale banking, we delivered growth across strategic flow businesses as our transformation towards an originate to distribute model continues to take effect. Additionally, our retail lending business continued to outperform in the domestic market."
Global Wholesale Banking (GWB) delivered revenue growth of five per cent year-on-year in the third quarter buoyed by growth across strategic flow businesses as transformation towards an originate to distribute model for core customers continues to take effect. Sequentially, revenues were down three per cent, reflecting seasonal volatility and softness in the relationship loan market. Disciplined expense management, with a focus on efficiency, saw costs decline four per cent year-on-year with a marginal increase of 1 per cent sequentially in the quarter.
GWB's balance sheet remains strong with customer deposits increasing 10 per cent year-on-year as the bank utilised its wholesale network to increase liquidity. Despite challenges, loan growth increased marginally by two per cent quarter-over-quarter, while the year-on-year decline of five per cent was influenced by the bank's move away from financial institutions trade lending towards higher yielding assets. Global banking's continued focus on its cash management proposition drove liquidity improvement of 12 per cent year-on-year and nine per cent quarter-over-quarter.
Global markets sales continued to maintain revenue momentum with a focus on providing quality yield solutions for financial institutions, non-banking financial institutions and corporate customers as well as increasing flows across locations. The diversified nature of the business ensured that the flow trading and investment book's performance helped weather the heightened market volatility and credit conditions.
- business@khaleejtimes.com