NBAD net profit rises 20.5%

Abu Dhabi: The National Bank of Abu Dhabi (NBAD), Abu Dhabi's largest bank by assets, said on Monday its net profit rose 20.5 per cent on the year to Dh3.02 billion in the last financial year, but fourth quarter net profit fell 33.87 per cent on year to Dh492 million due to collective impairment provisions of Dh289 million.

"These are collective impairment provisions taken against the bank's performing loan portfolio," NBAD Chief Executive Michael H. Tomalin told Gulf News.

"We expect 2009 to be a year of good housekeeping. All the banks in the UAE have been impacted by the global financial crisis as the UAE is part of the global financial system. However, as the year goes along, we expect liquidity conditions to improve," Tomalin added.

Tomalin said despite the constraints, NBAD isn't scaling back its projections for revenue and net profit growth this year.

"We had a fantastic 2008 and we are hopeful the growth momentum will continue in 2009," he added.

NBAD's net profit for 2007 financial year stood at Dh2.51 billion, while its fourth quarter net profit during the same year was at Dh744 million.

"The bank continues to perform strongly at the operational level reflecting the sound fundamentals of the Abu Dhabi economy and the UAE. By international comparison NBAD's financial results for 2008 are strong and our ratings reflect that," NBAD quoted Tomalin as saying in a statement.

"However, NBAD is an active international bank and we are not immune from world events. The liquidity tightness in the UAE has yet to have its full effect on the real economy. We therefore expect a difficult 2009 although the exceptional collective provisions we have taken this year should put us in the best possible position to withstand it," Tomalin added.

"Earnings per share were Dh1.5 per share compared with Dh1.3 in 2007," said NBAD, adding the actual underlying performance of the loan book remains good. "Top line operating profits, before provisions and taxes, increased 46 per cent for the year to Dh3.8 billion. Income increased 45 per cent to Dh5.3 billion and costs grew 42 per cent to Dh1.49 billion," NBAD said.

The bank said its non-performing loans at the end of 2007 were Dh859 million and, during the whole of 2008, despite a Dh32 billion increase in the size of the loan book, non performing loans rose by Dh213 million to Dh1.07 billion.

"The annualised return on equity for the year is 24 per cent and in line with the bank's medium term strategic objectives to achieve an average return of 25 per cent over the economic cycle," said NBAD, adding that no property revaluations have been taken during the year.

NBAD said its total assets at the end of 2008 reached Dh165 billion, 18 per cent higher than at the end of 2007.

"Deposits rose from Dh82 billion at the end of 2007 to Dh103 billion at the end of 2008, a growth of 27 per cent. Customer loans grew from Dh80 billion to Dh112 billion for the same period," it added.