Dubai: The National Bank of Abu Dhabi (NBAD) on Tuesday reported a net profit of Dh2.82 billion, up 7.9 per cent for the half-year ended June 30, 2014 as compared to the same period last year.

For the second quarter of the year the bank reported a net profit of Dh1.424 billion, up 17.5 per cent year-over-year. NBAD’s operating profits in the first half grew to Dh3.4 billion, an increase of 2.2 per cent.

Net interest income (including income from Islamic financing) rose 3.7 per cent in the first half 2014. In the second quarter it increased 10.8 per cent sequentially and 4.6 per cent year-on-year. Net interest margin (NIM) for the first half of 2014 was 1.98 per cent down 7 basis points compared to first half of 2013.

Second quarter NIM was 1.97 per cent up 13 bps sequentially and down 9 bps year-over-year.

“In the second quarter of 2014, NBAD continued to generate solid momentum across business lines. The bank’s results reflect continued strength in underlying revenue and earnings growth. As we enter the second half of 2014, NBAD will continue to focus on generating long-term growth whilst maintaining its strong balance sheet and solid capital position,” said Nasser Al Suwaidi, chairman of NBAD.

Net fees and commissions were up 26.8 per cent in the first half of 2014, driven by increases in trade finance, retail, brokerage and lending related fees.

In the second quarter, they were up 12.1 per cent sequentially and 25.2 per cent year-on-year.

Operating expenses for the first half of 2014 were Dh1.664 billion, up 9.3 per cent. The bank’s total assets were up 6.7 per cent year-on-year. Net Loans and advances increased 4.8 per cent year-on-year and 1.8 per cent sequentially, driven primarily by international loan growth.

Customer deposits grew 8.2 per cent year-over-year and 1 per cent quarter-on-quarter sequentially. The bank continues to experience a strong and encouraging buildup of CASA [Current accounts and savings account] deposits with growth of 28.9 per cent year-over-year and 1.4 per cent sequentially.

“Our results in the second quarter of 2014 provide further evidence that our strategy is working. We are seeing positive underlying trends across our businesses, particularly our fee generating businesses. I expect these trends to continue in the second half of the year and in the years to come,” said Alex Thursby, group chief executive.

Net impairment charges in the first half of 2014 were Dh465 million, down Dh157 million, and reflecting continued improvement in asset quality and recovery in collateral values.

Specific provision charges also reflected significant improvement and were lower by Dh350 million in the first half of 2014.

Non-performing loans (NPL) increased by Dh63 million in the second quarter to Dh6.186 billion by the end of first half of 2014.

As of 30 June 2014, the NPL ratio stood at 3.29 per cent of the loan book and has gradually come down from a high of 3.55 per cent recorded in the first quarter of 2013. Total provisions represented 106.1 per cent of non-performing loans.

The bank reported a capital adequacy ratio of 16.2 per cent and a Tier-I ratio of 14.7 per cent as of 30 June 2014.