NBAD 2007 first-half net profit touches Dh1.185b, Q2 up 16pc

ABU DHABI — National Bank of Abu Dhabi (NBAD) has earned a net profit of Dh1.185 billion for the first half of 2007.

By Haseeb Haider

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Published: Thu 26 Jul 2007, 9:03 AM

Last updated: Sat 4 Apr 2015, 10:22 PM

For the second quarter 2007, net profit at Dh584 million were up 16 per cent compared with the corresponding quarter of 2006.

Annualised earnings per share were Dh1.49, up from Dh1.42 (restated) in the comparable period of 2006. The return on equity was 25.4 per cent, in line with the bank's medium-term strategic plan.

Total assets reached Dh124 billion at the end of the first half of 2007, up 53 per cent over the same period in 2006, with customer deposits up 53 per cent and loans up 29 per cent.

Capital resources, including the Dh2.5 billion of subordinated convertible notes, reached Dh12.1 billion, up 17 per cent from the corresponding period in 2006.

Operating income for the first half of 2007 was Dh1.7 billion including non-interest income of Dh600 million, 12 per cent up on the corresponding period in 2006, reflecting the concentration on diversifying fee earning sources. Operating expense growth of 45 per cent was high but within plan, reflecting the planned and continued investment in infrastructure, systems, network and people.

The cost income ratio of 28 per cent compares with 22 per cent in the first half of 2006, but is well within the bank's medium term cap of 35 per cent.

"Over time, the cost income ratios of UAE banks are likely to move closer to international norms", Michael H. Tomalin, chief executive, said.

Domestic banking business was the biggest contributor to the group's operating profits at 54 per cent with international business and investment banking businesses contributing 19 per cent and 21 per cent respectively. Head office, which is run like a business, contributed six per cent.

An wholly-owned private banking subsidiary in Geneva was inaugurated in late June 2007. "We expect to start the operations of our Islamic subsidiary in Abu Dhabi by the third quarter of 2007 with our real estate subsidiary to follow in the fourth quarter of this year," Tomalin said.

After recent upgrades by Fitch and Standard and Poors, NBAD has one of the highest credit ratings in the region comparable with many medium sized European banks.

Net impaired asset provisions were Dh7 million in the first half of 2007 against Dh24 million for the same period in 2006. "Overall, provisions are modest in comparison with the size of the bank's business and reflect our relatively conservative credit strategy and strong asset quality," Michael Tomalin said.

The provision cover of impaired loans reached 105 per cent by the end of the 1st half of 2007.

"The first half results are solid. The core businesses of the bank are performing well and NBAD is well positioned in capital resources and liquidity to take advantage of the huge opportunities in Abu Dhabi", Tomalin added.

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