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Interest incomes drive up NBAD profit by 12% in Q1

ABU DHABI — National Bank of Abu Dhabi reported 12 per cent year-on-year increase in net profits to Dh1.041 billion for the quarter ended 31 March, on better interest incomes.

The second biggest lender in the country, which is on track to branch out in Asia’s biggest economy China and Malaysia in the next quarter, reported 44 per cent growth to its net profits over the fourth quarter of last year.

Operating profits grew by 5.2 per cent to Dh1.384 billion over the corresponding quarter of 2011, mainly driven by the international businesses and financial markets businesses, which achieved a growth of 30 per cent and 15 per cent year-on-year, respectively.

New products, clients and assets under management coupled with some recovery in capital market activities enabled Global Wealth businesses to triple its operating profits to Dh29 million.

Operating income for the quarter was up eight per cent to Dh2,030 million, while net interest income and net income from Islamic financing contracts for the first quarter of 2012 rose 5.9 per cent year on year to Dh1.460 billion. Michael Tomalin, Group chief executive, said: “The first quarter result has got the Group off to a strong start for the year in what remains a generally difficult market for banking.”

The net interest margin was 2.14 per cent for the quarter, lower than 2.48 per cent for the corresponding quarter last year due to increase in short-dated secured lending and maintaining a liquid balance sheet.

Loans and advances comprise only 56 per cent of total assets as at 31 March 2012 lower than last year’s average of 63 per cent. Operating expenses grew 14 per cent in the quarter to Dh45 million. The cost to income ratio improved at 31.8 per cent in the period lower than the 32.5 per cent recorded for the year 2011 and remains below the Group’s medium-term cap of 35 per cent...

Non-performing loans increased to Dh5.100 billion representing 3.03 per cent of the loan book.

During the quarter, NBAD expanded its domestic presence to 122 branches and cash offices and 529 ATMs. “Our investments in the franchise, network and systems, products and people are in line with our vision to be recognised as the World’s Best Arab Bank,” said the bank in a statement.

Nasser Alsowaidi, Chairman of NBAD said: “Regional and global uncertainties continue to have an overhang on business sentiments and growth. Despite this, NBAD continues to perform well.”

Michael Tomalin said in the three months period “deposits rose sharply”. But core deposits grew more steadily.

The liquidity of the Group remains strong and loan balances continue to grow at round Dh1 billion per month, he said.

Non-performing loans increased to Dh5.100 billion representing 3.03 per cent of the loan book.
— haseeb@khaleejtimes.com