NBAD profit jumps 35.5%

A substantial growth in investments and an increase in incomes from fees and net interest has led the National Bank of Abu Dhabi, or NBAD, to net 35.5 per cent more profit to Dh1.409 billion in the January-to-March period.

The nation’s second-biggest lender by assets showed growth in total assets, deposits and investments; however, loan and advances marginally fell 0.5 per cent in the quarter. Assets grew 11.3 per cent to Dh322 billion versus March 31, 2012, and were up 7.1 per cent against December 31, 2012. Loans and advances to customers were Dh162.4 billion at the end of the first quarter.

NBAD’s customer deposits grew 9.6 per cent to Dh205.6 billion due to net inflows of government deposits. — Supplied photo

Customer deposits grew 9.6 per cent to Dh205.6 billion due to net inflows of government deposits. Operating profits jumped 28.8 per cent to Dh1.783 billion for the current quarter compared to Dh1.384 billion recorded in the first quarter of 2012. Operating income increased by 23.7 per cent to Dh2.510 billion, up from Dh2.030 billion in the first quarter last year.

Net interest income and net income from Islamic financing was up 5.3 per cent year-on-year to Dh1.536 billion in the quarter, while net fees and commissions grew by 8.9 per cent to Dh414 million. Overall, non-interest income grew strongly by 70.9 per cent year-on-year in the quarter to Dh974 million, driven primarily by a net investment income of Dh264 million and other operating income of Dh163 million, reflecting a combination of strength in financial markets and successful hedging strategies.

Non-performing loans, or NPLs, rose to Dh5.961 billion, representing 3.55 per cent of its loan book and in line with indications at the beginning of 2012 that NPLs should plateau at between 3.5 per cent and 3.75 per cent. Total provisions represented 94.8 per cent of NPLs.

“The bank’s performance in the first quarter once again demonstrates our ability to deliver solid results in a challenging global environment. The continued strength of our balance sheet, capital position and liquidity is an example of our ongoing commitment to excellence,” said Nasser Alsowaidi, chairman of NBAD.

“In the first quarter, we delivered a top line growth of 24 per cent whilst growing the bottom line by over 35 per cent. This growth is a result of the diversified business model we have, and I expect this growth to continue in the years to come,” said Michael Tomalin, group chief executive of NBAD.

The bank repaid a further Dh1.5 billion of the original Dh5.6 billion Ministry of Finance-subordinated notes during the quarter and repaid the remaining Dh1.5 billion at the start of the second quarter.

Basle-II ratios remain strong and well above the minimum 12 per cent and eight per cent (Tier-I) required by the UAE Central Bank, with a capital adequacy ratio of 19.7 per cent and a Tier-I ratio of 17.3 per cent as of 31 March. The bank closed its inaugural Kangaroo bond with a coupon rate of five per cent and face value of $308 million (Dh1.131 billion).

NBAD also launched a 15-year Uridashi bond worth $16.6 million, which is the first of its kind from the Middle East and North Africa region, and allowed NBAD to directly access Japanese retail investors.

— haseeb@khaleejtimes.com