NBAD bags Dh1.34b net profit in first half

ABU DHABI —National Bank of Abu Dhabi (NBAD) has emerged as the largest bank in the country in terms of net profits, as it bagged net profits of Dh1.34 billion, during the first half of the year, up 166 per cent, surpassing its own record profit earnings of Dh1 billion, which it achieved in previous year. For the second quarter, net profits were up 191 per cent over the corresponding quarter of 2004.

By A Staff Reporter

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Published: Tue 19 Jul 2005, 10:51 AM

Last updated: Thu 2 Apr 2015, 4:42 PM

Total assets reached a record Dh65 billion, at the end of the first half of 2005, up 33 per cent on the same period in 2004, with deposits rising 22 per cent and loans making a marathon jump of 30 per cent. Shareholders equity recorded 37 per cent increase and amounted to Dh6.1 billion during the period.

"We are delighted with this outstanding record breaking performance driven by the underlying strong performance of our domestic and investment banking businesses and the growth in the UAE economy and local equity market", said Michael H. Tomalin, Chief Executive of NBAD.

Operating income during the first half of 2005 was Dh1.78 billion, including non-interest income of Dh1 billion, 225 per cent up compared to the corresponding period in 2004, reflecting the concentration of diversifying our fee earning sources.

Operating income rose 133 per cent year-on-year, outpacing the expense growth of 31 per cent, which resulted in a cost income ratio of 16.5 per cent, compared with 29.2 per cent in the first half of 2004.

The bank will continue to invest, as planned in infrastructure, systems, networks and people and strike a balance between investing for the future and rewarding shareholders.

Domestic banking profit were up 103 per cent over the first half of 2004. Investment banking earnings were 621 per cent over the same period in 2004 while International banking also went three per cent up.

Investment banking earnings were influenced by the overwhelming performance of the broking and asset management businesses which both benefited from the very sharp rise in domestic equity markets.

Net impaired assets provisions were Dh123 million in the first half of 2005, against Dh22 million for the same period in 2004.

"We added Dh74 million in the second quarter to our portfolio provision as a prudent measure and to reflect the growth of our credit portfolio. Overall, provisions are modest in comparison with size of the bank's business and reflect our relatively conservative credit strategy."

The return on equity and the cost income ratio are substantially above trend-line, and are unsustainable in the medium term at these levels. Nevertheless, the bank's underlying performance continues to be strong and the result for the full year is likely to demonstrate this.

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