Abu Dhabi: National Bank of Abu Dhabi's (NBAD) operating profits are expected to rise 10 per cent this year compared to last year, NBAD group chief executive officer Michael Tomalin told Gulf News in a telephone interview on Tuesday, shortly after the bank announced its fourth quarter financial results.
"The increase in the net profit would depend on the provisions that we have to take in 2011," said Tomalin.
NBAD's net profit for the fourth quarter last year rose 71 per cent on year to Dh732 million while for the full financial year of 2010 the bank's net profit was up 22 per cent year-on-year to Dh3.68 billion, the bank said in a statement to the Abu Dhabi Securities Exchange, where its shares are listed.
"2010 was not the easiest year for banking and we have continued to make substantial provisions for non-performing loans. Notwithstanding this, the robustness of our business model has been demonstrated in a 22 per cent increase in net profits, which, for the first time in the history of NBAD, reached the equivalent of $1 billion," said Tomalin.
"The board of directors is recommending to shareholders a 30 per cent cash dividend and a 20 per cent stock dividend in the light of this year's record results," the bank said.
Tomalin said looking ahead the bank would continue to develop its retail platform and increase the number of branches in the UAE.
As well, he said the bank would enhance its products in retail, business banking (SMEs) and Islamic banking.
China, Malaysia offices
"We will also position ourselves to enable our corporate clients to raise long-term debt in the debt capital markets. As regards our overseas operations, we are hoping to open a subsidiary in Malaysia this year. We also have plans to open a representative office in Shanghai," Tomalin added.
He said NBAD's private banking subsidiary in Switzerland became profitable last year as well as its Hong Kong branch, while the branch in Jordan achieved a breakeven.
NBAD's total assets were Dh211.4 billion as of December 31, up 7.4 per cent year-on-year, the bank said. Deposits stood at Dh123.1 billion on December 31, up 6.5 per cent on year. The bank's loans and advances to customers increased 3.5 per cent in 2010 to Dh136.8 billion.
Good loan book
"The quality of the loan book remains good with non-performing loans of Dh3,249 million representing 2.3 per cent of our portfolio. Net impairment charges of Dh1,207 million for the year consist of collective provisions of Dh288 million, net specific charges of Dh826 million and other provisions on land and investments of Dh93 million, NBAD added.
"Operating income for the full year 2010 reached Dh7.2 billion, 12.2 per cent up compared with Dh6.4 billion for 2009. Net interest income and net income from Islamic financing contracts for the same period rose 14.8 per cent to Dh5.2 billion compared with 2009, net fees and other non-interest income increased by 5.6 per cent to Dh1,929 million notwithstanding subdued market conditions," said NBAD.