Local Business

NBAD profits surge 13.8%

Muzaffar Rizvi (muzaffarrizvi@khaleejtimes.com)
Filed on October 30, 2013

The National Bank of Abu Dhabi (NBAD) on Tuesday said its nine-month net profit surged 13.8 per cent to Dh3.65 billion as the bank maintained its solid balance sheet and strong capital position.

The UAE’s largest lender by market value said revenues rose 11.3 per cent to due to higher fee and interest income during January-September 2013 period. The bank’s assets climbed 14.8 per cent to Dh345.1 billion while customer deposits soared 20.6 per cent to Dh229.5 billion. Loans and advances increased 10.9 per cent to Dh182.5 billion.

“The first nine months demonstrate the strength of NBAD and our ability to deliver consistent results over time. We delivered strong revenue and earnings growth whilst maintaining our solid balance sheet and strong capital position,” Nasser Alsowaidi, chairman of NBAD said.

The bank’s net profit during July-September 2013 quarter fell eight per cent to Dh1.035 billion compared to Dh1.125 billion in same quarter of 2012, however it declined 14.6 per cent if compared to second quarter of 2013. This is the bank’s first quarterly profit drop since the fourth quarter of 2011. However, the annualised return on average equity for the first three quarters of 2013 was 15.1 per cent, relatively in line with 15.3 per cent for same period last year.

Operating profits grew 11 per cent to Dh4.744 billion in first nine month of 2013. Operating profits by segment were Dh3.111 billion in global wholesale banking, Dh355 million in global wealth and Dh1.203 billion in retail and commercial. Head office’s contribution was Dh75 million, driven primarily by other operating income resulting from hedging gains in the first two quarters.

“Our results for the first nine months of 2013 were solid. I have now laid out my strategy for the next five years, and we are beginning to gain momentum as we focus on being core to our chosen customers,” Alex Thursby, group chief executive said.

The Abu Dhabi-based bank said its net interest income, including income from Islamic financing, rose 6.8 per cent during January-September 2013 primarily due to lower funding costs and slightly higher interest income. Margins were down in the third quarter to 1.95 per cent versus 2.06 per cent in the second quarter.

The bank’s net fees and commissions continued to be strong and rose 18.5 per cent during July-September quarter. Investment gains plunged 91.6 per cent and other operating income tumbled by 88.6 per cent in third quarter due to non-repeating gains from hedging strategies on Ministry of Finance (MoF) Tier-2 capital notes realised in same quarter last year. The remaining amount of MoF Tier-2 capital notes (Dh3billion) was repaid in the first and second quarters of 2013, and gains related to hedges on the notes are included in other operating income of Dh314 million.

“Overall, we are well positioned for continued success in the future. I believe we have the right strategy in place and our challenge going forward will be to execute against that strategy,” Thursby said.

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