Dubai: The National Bank of Abu Dhabi (NBAD) on Wednesday reported Dh2.9 billion in net profit for the first quarter of 2017, marking a 12.4 per cent jump from the Dh2.6 billion recorded in the same quarter of 2017.

The results reflect those of the entity that resulted from the merger of NBAD with First Gulf Bank (FGB), and are on a pro-forma basis. The merger was effective at the beginning of April, so the results reflect a combination of the finances of each bank in the first quarter.

The bank’s revenues rose 8.5 per cent to reach Dh5.2 billion on the bank of “healthy business volumes and investment gains,” NBAD said.

Abdul Hamid Saeed, group chief executive officer of the merged bank, said the rise in profits was supported by “notable improvements in efficiency and asset quality.”

“As the largest bank in the UAE and one of the world’s largest and strongest financial institutions, we are firmly on track to move forward and pursue growth opportunities across the UAE, Middle East and North Africa, and beyond,” he said.

In a statement, the CEO said 2017 was poised to a “transitional year for the economy and for the banking industry,” adding that the bank was confident about driving growth.

As for updates on the merger between NBAD and FGB, Saeed said that the banks over the next few months will be focusing on “establishing a strong platform across our various businesses to ensure that we have the right infrastructure.”

The bank also said it has made “significant progress” on the personal banking side regarding product harmonization, value propositions, and product offerings. Further due diligence is scheduled, especially for digital channels, that will be conducted over the next two quarters.

The new entity is named First Abu Dhabi Bank, but that name is still subject to shareholder approval, which is expected on April 24 when the bank holds a general assembly meeting.

The merged entity realised cost synergies of Dh75 million during the first quarter of 2017. The bank said the merger process was progressing as per the initial schedule.

Meanwhile, impairments in the first quarter of this year reached Dh645 million, down around 4 per cent from the Dh671 million recorded in the same quarter of 2016, but 9 per cent higher than the Dh590 million recorded in the fourth quarter of 2016.

The high impairment costs mirror a trend across the UAE’s banks over 2016 as they grapple with an increase in bad loans from corporate and retail customers amid slower economic growth.

The bank’s non-performing loans ratio was 2.5 per cent in the first quarter of 2017.

On the balance sheet side, loans and advances rose 4.6 per cent to reach Dh367.7 billion at the end of March 2017, compared to Dh351.7 billion at the same time in 2016. Customer deposits were also higher, reaching Dh415.7 billion at the end of the quarter – an 11 per cent increase from the Dh374 billion in the same time last year.