Dubai: The National Bank of Abu Dhabi (NBAD) reported a net profit of Dh5.57 billion in 2014, up 18 per cent compared to the previous year.

For the fourth quarter of the year, the bank’s net profit was up 28 per cent year on year at Dh1.37 billion, beating analyst forecasts.

The bank said its growth last year was driven primarily by strong fee income growth across all lines of business, solid loan growth, increases in deposits and CASA [current and savings accounts] as a per cent of deposits and solid gains in the investment portfolio.

“In the fourth quarter and full-year 2014, NBAD once again delivered strong revenue and earnings growth whilst maintaining a solid balance sheet and strong capital position. The bank now ranks 25th, up from 35th, among the ‘World’s 50 Safest Banks’ as ranked by Global Finance magazine,” said Nasser Al Suwaidi, NBAD chairman.

The bank’s full-year revenues were up 11 per cent to Dh10.41 billion on the back of fourth-quarter revenues which surged 18 per cent to Dh2.7 billion year-on-year. While total assets were up 16 per cent at Dh376.1 billion as at the end of 2014, loans and advances grew 6 per cent to Dh194.3 billion.

Customer deposits were at Dh243.2 billion at the year end, up 15 per cent.

Net interest income (NII) including income from Islamic financing was up 8 per cent to Dh7.018 billion in 2014 while the fourth quarter NII was up 14 per cent year-on-year at Dh1.89 billion. Non-interest income grew 18 per cent to Dh3.39 billion last year as net fees and commission income grew 25 per cent to Dh2.31 billion in 2014 compared to the previous year.

NBAD’s net interest margin (NIM) for last year was down 2 per cent, down from 2.08 per cent in 2013. The bank attributed the NIM compression to increased competition resulting from abundant liquidity as well as re-pricing of risk.

“In 2014, we generated solid, underlying profitable growth across our businesses and we are confident that this momentum will continue to accelerate as we look forward to 2015,” said Alex Thursby, group chief executive.

The bank’s net impairment charges for the full year were Dh868 million, reflecting a decline of Dh338 million or 28 per cent. Operating expenses were up 14 per cent at Dh3.69 billion compared to 2013.

In 2014, NBAD continued to experience write-backs as specific provision charges were lower by Dh229 million.

During last year non-performing loans decreased by Dh147 million to Dh6.16 billion. As of year-end 2014, the NPL ratio stood at 3.07 per cent of the loan book and has continued to remain relatively low after peaking at 3.55 per cent in 1Q 2013.

“NBAD reported robust growth in bottom-line mainly due to strong growth in net and non-interest income and a decline in provisions,” said Naveed Ahmed, Senior Manager, Research Group Global Investment House. “Despite significant increase in CASA deposits and lower funding costs, the bank’s NIM was under pressure during the fourth quarter. The bank’s asset quality improved during the quarter as the NPL ratio reduced to 3.07 per cent in 2014 from 3.16 per cent in 2013.”

The bank’s capital adequacy ratio was at 16.4 per cent at the end of 2014 with a Tier-1 ratio of 15 per cent. At the close of the year, earnings per share were at Dh1.12, compared to Dh0.95 in 2013. The board has recommended a cash dividend of 40 fils per share and stock dividend of 10 per cent.