NBAD first-quarter profit jumps 45% to Dh875m

Dubai: The National Bank of Abu Dhabi (NBAD) reported a net attributable profit to shareholders of Dh875 million in the first quarter of 2008, 45 per cent up on the corresponding quarter of 2007, an annualised earnings per share (EPS) of Dh1.81, up from Dh1.25 (restated) in the comparable period of 2007.

Total assets reached Dh157 billion, up 41 per cent from March 2007.

The bank also expects to open a branch in Hong Kong in the fourth quarter as it relies on "organic growth" to expand.

Records

"Three records were set this quarter. First, the bank recorded an all-time high quarterly profit. Second, assets reached Dh157 billion ($43 billion) for the first time, and third, the bank's capital resources exceeded Dh16 billion" said Michael H. Tomalin, NBAD's Chief Executive.

"First quarter profit of Dh875 million benefited from a one-off gain of Dh165 million (net of expenses) on the sale of land purchased as a regional office site in northern emirates but subsequently exchanged for another.

"Core earnings are therefore Dh710 million in the first quarter, after an increase in portfolio provisions of Dh60 million, mirroring the growth in our loan portfolio.

"Impaired loans, as on March 31 were Dh855 million, 110 per cent covered by provisions."

The bank's Tier 1 capital increased to Dh13 billion after the payment of the Dh659 million cash dividend, first quarter retained earnings, and Dh1.4 billion of new equity following the partial conversion of the 2006 convertible issue.

After a new Dh2 billion convertible was issued in the first quarter of 2008, and the reduction of Dh1.4 billion of the 2006 convertible issue following the partial conversion, the total capital resources of the bank now exceed Dh16 billion.

Loans and advances to customers reached Dh93 billion, up 51 per cent on the March 31 comparable. The growth in advances is strong, reflecting, in particular, the demand in Abu Dhabi to finance the substantial growth in the emirate.

Customer deposits rose 29 per cent over the year to Dh92 billion. Cash and balances with the Central Bank were Dh39 billion at the end of March 2008, 160 per cent above the levels in March 2007.

The group's return on equity was 29.7 per cent in the first quarter, above the 25 per cent medium term target. The cost income ratio was 25.5 per cent; again below the 35 per cent medium term expected level.