NBAD profit Dh1.13b in ’06 H1

ABU DHABI — National Bank of Abu Dhabi (NBAD) has made net profits of Dh1.13 billion for the first half of 2006, equivalent to the full year profits of 2004, and representing a return on equity of 30 per cent.

By A Staff Reporter

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Published: Thu 13 Jul 2006, 12:27 PM

Last updated: Sat 4 Apr 2015, 3:09 PM

Total assets reached Dh81billion at the end of the first half of 2006, up 25 per cent on the same period in 2005, with customer deposits up 19 per cent and loans up 17 per cent. Capital resources reached Dh10.3 billion, up 69 per cent from the corresponding period in 2005.

Operating income for the first half of 2006 reached Dh1.5 billion including non-interest income of Dh 0.5billion. Operating expenses grew by 12 per cent, which resulted in a cost income ratio of 22 per cent. Going forward, the bank will continue to invest, as planned, in infrastructure, systems, network, people and brand,

and strike a balance between investing for the future and rewarding shareholders.

Domestic banking contributed 57 per cent to the first half of 2006 profits. Domestic banking profits increased 37 per cent half-year-on-half-year to Dh 648 million reflecting a solid performance in both the retail and corporate businesses. International banking contributed 14 per cent and International profits increased to Dh162 million or 33 per cent over the corresponding period.

NBAD's international banking business continues to do well and is expanding fast. In Egypt, the Bank has

opened its 18th branch in Luxor, becoming one of the largest foreign banks operating in Egypt. Investment banking contributed 22 per cent to group profits with profits falling 69 per cent to Dh249

million. Falling equity markets affected both its asset management and equity brokerage businesses.

Nevertheless, investment banking profits are still above 2004 levels.

Net impaired asset provisions were Dh24 million in the first half of 2006 against Dh123 million for the same period in 2005. Impaired assets are more than 100 per cent provided. Overall, provisions are modest in comparison with the size of the Bank's business and reflect relatively conservative credit strategy and strong asset quality.

Commenting on the overall results, the Chief Executive, Michael Tomalin said: "Although top level profits are down 15 per cent in the first half of 2006, our underlying performance is strong and we remain well positioned. In the second quarter of 2005, the bank earned a remarkable profit of Dh835 million buoyed by strong equity markets."

He said he had commented on this in his review of the first half of 2005 that the level of profits was

unsustainable in the medium term.

First half 2006 earnings represent core earnings and are above core earnings in the first half of 2005. The return on equity for the first half of 30 per cent represents one of the best in the industry, both locally and internationally.

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