National Bank of Abu Dhabi and First Gulf Bank both reported profit increases in the second quarter. The news comes as the capital's two biggest banks reaped the benefits of strong earnings on assets.
NBAD and First Gulf Bank reap benefits on assets
National Bank of Abu Dhabi (NBAD) and First Gulf Bank both reported profit increases in the second quarter.
The news comes as the capital's two biggest banks reaped the benefits of strong earnings on assets.
NBAD's net profit rose 2 per cent to Dh1.05 billion (US$285.8 million) from the same quarter of last year, the bank said.
"The group has not changed its forecasts for 2012," said Michael Tomalin, the NBAD chief executive. "[We are] assuming continuing current market conditions, mid to high single-digit growth in earnings for the year with non-performing loans peaking around 3.75 per cent of performing loans by year end or early 2013."
The increase in top-line revenues was driven by higher net interest income and proceeds from Islamic financing contracts, which rose 4.6 per cent in the first half.
Net impairment charges booked by the bank dropped by 13.2 per cent to Dh605m in the first half.
Deposits dropped from Dh187bn in the first quarter to Dh160.5bn in the second quarter. Analysts said this suggested a major shareholder may have withdrawn cash. Non-performing loans rose to Dh5.34bn.
First Gulf Bank, Abu Dhabi's second-largest lender by market value, reported a 14 per cent rise in second-quarter profits from a year ago. Net profit rose to Dh1.02bn during the second quarter, up from Dh890m a year previously. Stronger lending growth was a significant factor behind the improved performance.
Loans and advances edged up 6 per cent in the first half of the year to Dh110.9bn.
"As the UAE continues to be seen as a safe refuge for investors in the region, this is definitely supporting the bank to realise its strategy," said Abdulhamid Saeed,the lender's managing director.
Abu Dhabi Commercial Bank's second-quarter net profit slumped 45 per cent to Dh733m from a year earlier. The drop was mainly due to a one-off gain of Dh1.31bn in June last year.
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