National Bank of Abu Dhabi Posts 2% Q2 Profit Rise
NBAD, the largest bank by market value in the UAE, saw second quarter profit grow on higher net interest income.
National Bank of Abu Dhabi, the largest lender by market value in the UAE, reported a two per cent rise in quarterly profit on Tuesday due to higher net interest income, meeting forecasts.
NBAD had second-quarter net profit of Dhs1.05 billion ($284.8 million), up from Dhs1.03 billion in the same period a year earlier, the bank said in a statement.
Analysts had forecast an average profit of Dhs1.031 billion in a Reuters poll.
Net profit for the first half of the year rose 6.9 per cent to Dhs2.08 billion compared to Dhs1.95 billion in the opening six months of 2011.
The improvement in top-line revenue was due to higher net interest income and net income from Islamic financing contracts, the bank said, which grew 4.6 per cent in the first half of 2012 compared to the same period last year.
“The group has not changed its forecasts for 2012,” said CEO Michael Tomalin who is slated to retire this year.
“Assuming continuing current market conditions, (we expect) mid to high single digit growth in earnings for the year with non-performing loans peaking round 3.75 per cent of performing loans by year end or early 2013,” he said.
The bank booked net impairment charges of Dhs292 million in the three months to June 30, a drop of 12 per cent on the same period last year.
Provisions for the first six months of 2012 were down 13.2 per cent due to lower collective provisions and strong recoveries, the statement said.
Non-performing loans increased to Dhs5.34 billion, accounting for 3.18 per cent of the loan book. At the end of the second quarter of 2011, they stood at Dhs4.17 billion, or 2.65 per cent of the loan book.
Operating income for the quarter reached Dhs2.07 billion, up 3.2 per cent over the same period last year. The corresponding period of 2011 yielded Dhs2 billion.
Loans and advances grew to Dhs162.8 billion at the end of the second quarter, up 2.1 per cent on the end of 2011 and 6.4 per cent on the same point last year.
Short-term government deposits worth Dhs27.2 billion, which had been placed with NBAD in the first quarter, were withdrawn in the second, meaning a 14.5 per cent quarter-on-quarter slump in deposits at the bank.
Compared to the end of 2011, deposits were up 5.7 per cent to Dhs162.8 billion.