National Bank of Abu Dhabi, buoyed by a rise in income from loans, reports a 2.5 per cent increase in second-quarter profits.
NBAD looks to the top line as loans boost its profits
National Bank of Abu Dhabi (NBAD) reported a 2.5 per cent increase in second-quarter profits, buoyed by a rise in income from loans.
Net profit rose to Dh1.03 billion (US$280.4 million) compared with Dh1bn in the same period last year, the bank said.
"Our focus remains on top-line operating revenue," said Michael Tomalin, the chief executive of NBAD, the UAE's second-biggest bank by assets. "Given the weak global economy and some regional uncertainty, low interest rates and absence of any major exceptional items, this increase can be judged a fine achievement."
UAE banks have been striving to rebound from the global financial crisis and credit crunch that caused investments and loans to sour. But an easing of liquidity and an improving local economy are helping to underpin better performance.
The bank's operating income expanded 13 per cent over the same period to Dh2.01bn. Total lending rose 12 per cent to Dh153bn from December last year, with customer deposits growing 19.5 per cent to Dh147.2bn. Net bad loan charges rose 39 per cent to Dh331.2m, increasing the proportion of bad loans to total lending to 2.65 per cent.
Exposure to the UAE's weak property market has been a drag on many of the country's lenders.
"Longer-term prospects for the bank remain clear and bright as we continue to implement our strategies, which are aligned with the growth of Abu Dhabi and UAE and continue with our prudent underwriting policies," said Nasser Al Sowaidi, the NBAD chairman.
During the second quarter, NBAD opened a second branch in Jordan and a fourth business banking centre in the UAE, aiming to expand its services to small businesses. It has already sought to expand its overseas network with an Islamic bank in Malaysia and a licence to begin operations in Shanghai.
Before the results, NBAD's shares closed unchanged at Dh11.05 on the Abu Dhabi Securities Exchange.
Meanwhile, Commercial Bank of Dubai, a lender 20 per cent owned by the Dubai Government, said its second-quarter profit rose 2 per cent to Dh260m, from Dh255.3m in the same period last year.