National Bank of Abu Dhabi (NBAD), the largest lender by assets in the United Arab Emirates, beat analyst forecasts as it reported a 27.6 per cent rise in fourth-quarter net profit on Wednesday on higher fee income and lower impairments.
Banks in the United Arab Emirates (UAE) have enjoyed a strong reporting period, with lenders recording higher profits on the back of robust local economic conditions.
NBAD, almost 70-per cent owned by Abu Dhabi’s government, made a net profit of Dhs1.372 billion ($373 million) in the three months to Dec. 31, up from Dhs1.075 billion in the corresponding period of 2013, the bank said in a statement.
Four analysts polled by Reuters earlier this month forecast an average net profit of Dhs1.29 billion.
Aiding the profit increase was a 28.8 per cent jump in non-interest income to Dhs862 million.
Banks in the Gulf, given the high levels of competition in traditional activities such as lending, have been shifting their focus to earning income from other means, such as advising on bonds and mergers.
Lending by NBAD grew six per cent in 2014 to Dhs194.3 billion.
Lower impairments also contributed to the profit increase, with the amount of cash set aside for bad loans down 29.6 per cent year on year in the fourth quarter to Dhs200 million.
For 2014, the bank said net profit was Dhs5.579 billion, up 17.6 per cent from 2013.
The bank said its board proposed a cash dividend of Dhs0.4 per share and a stock dividend of one share for every 10- held for 2014. This is in line with what NBAD paid out in 2013, according to previous disclosures from the bank.