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National Bank Of Abu Dhabi Q3 Net Profit Rises 32%

National Bank Of Abu Dhabi Q3 Net Profit Rises 32%

NBAD made a net profit of Dhs1.37 billion ($373 million) in the three months to Sept. 30.

National Bank of Abu Dhabi, the largest lender in the United Arab Emirates, reported a 32 per cent rise in third-quarter net profit on Tuesday, helped by higher non-interest income and needing to set aside less cash for bad loans.

Bumper estimate-beating third-quarter earnings have been posted across the UAE banking sector, with lenders benefiting from a strong domestic economic backdrop and improving asset quality since a downturn at the start of the decade.

On Monday, First Gulf Bank, Mashreq and Union National Bank reported respective year-on-year net profit gains of 20 per cent, 26 per cent and 22 per cent, maintaining the positive picture painted by banks who published numbers earlier in the reporting period.

NBAD, almost 70-percent owned by Abu Dhabi’s government, made a net profit of Dhs1.37 billion ($373 million) in the three months to September 30, up from Dhs1.03 billion in the corresponding period of 2013, the bank said in a statement.

Six analysts polled by Reuters earlier this month forecast an average net profit of Dhs1.35 billion.

“Our year-to-date results reflect continued strength in underlying revenue and earnings growth,” Nasser al-Sowaidi, chairman of NBAD, said in the statement.

Quarterly revenues totalled Dhs2.6 billion, up 17.1 per cent over the prior-year period, led by non-interest income – which includes fees and commission – which was nearly 40 percent higher over the third quarter last year at Dhs774 million.

Chief Executive Alex Thursby said after the bank’s first-quarter earnings that the bank would be focusing on growing its fee income to offset the falling profitability of traditional lending business in the country due to fierce competition among banks flush with cash.

Despite this strategy, total loans by the bank jumped in the third quarter. Year-to-September 30 growth was 7.7 per cent, the bank said on Tuesday, reversing the 1.1 per cent decline in lending posted in the first six months of 2014.

Net impairment charges fell to Dhs202 million in the quarter from Dhs299 million a year ago, continuing the trend of improving asset quality.

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