Dubai: National Bank of Abu Dhabi (NBAD) reported Dh2.86 billion net profit for the first half of 2015, up 1 per cent from the same period last year.

For the second quarter of the year the bank posted Dh1.44 billion, up 1 per cent year-over-year and 2 per cent sequentially.

“In the first half of 2015, NBAD delivered consistent profits in an increasingly difficult environment, whilst maintaining a strong balance sheet and robust capital position,” said Nasser Al Suwaidi, Chairman of NBAD.

Bank’s assets were up 13 per cent at Dh393 billion year on year at the end of the second quarter and down 2 per cent sequentially as increases in loans and advances were offset by a reduction in customer deposits.

Net loans and advances were up 20 per cent year on year at Dh218 billion at the close of the second quarter and were up 9 per cent sequentially as the bank used its balance sheet strength to continue to support clients despite the tighter liquidity environment.

Customer deposits were at Dh230 billion at the end of the second quarter, down 3 per cent year-on-year and down 8 per cent quarter on quarter. Core customer deposits continued to grow with current and savings account (CASA) deposits growing 11 per cent to Dh71 billion and now representing 31 per cent of total deposits.

During the second quarter, expenses were relatively flat and credit quality remained very strong. Balance sheet growth was strong year-over-year, driven by a strong uptick in lending

“We generated strong results in global wholesale flow products, our retail and commercial business, as well as international, which has become an integral part of the development of our wholesale and wealth network businesses. We delivered this growth despite economic and market headwinds, including lower oil prices, margin compression and lower non-customer income in our global markets business,” said Alex Thursby, group chief executive.

Bank’s net interest income (NII) including income from Islamic financing was Dh1.84 billion in the second quarter, up 5 per cent year on year. For the first half, NII was Dh3.63 billion representing 9 per cent year-on-year growth driven by strong lending growth. Non-interest income was up 6 per cent in the second quarter, while it was up 1 per cent at Dh1.77 billion in the first half of the year.

Net interest margin for the first half of the year was 1.98. “Through effective balance sheet optimisation, we have been maintaining stability despite margin compression pressures from strong competition in the UAE,” said Thursby.

Asset quality continued to improve with improvement in net impairment charges, recovery in collateral values and prudent risk management processes. Net charges in the second quarter were Dh166 million, down 2 per cent sequentially and 23 per cent year-over-year.

Non-performing loans decreased by Dh110 million in the second quarter to Dh5.84 billion and the NPL ratio stood at 2.6 per cent of the loan book. Total provisions represented 112 per cent of non-performing loans at the close of the second quarter.

The bank reported strong capital position with a capital adequacy ratio of 16.6 per cent and a Tier-I ratio of 15.4 per cent as of June 30.