National Bank of Abu Dhabi reported a 14.6 per cent decline in third-quarter profits. The country’s largest bank reported a net profit of Dh1.035 billion in the three months to the end of September, down 14.6 per cent as compared to the second quarter, and down 8 per cent on the same period a year earlier.
Profits for the quarter fell short of analysts’ expectations for the second quarter in a row. Analysts had expected net profits to rise slightly to Dh1.216bn in the third quarter, up from Dh1.212bn in the second.
The bank attributed the fall in income to a decline in investment gains and other operating income, largely attributable to non-repeating gains from hedging strategies on Ministry of Finance Tier-2 capital notes realised in the third quarter last year.
However, the bank’s profits for the first nine months of the year rose 13.8 per cent to Dh3.66bn on last year.
The bank said that global economic growth this year was weaker than in 2012 because of fiscal consolidation in many developed economies, but that an acceleration of was forecast for 2014.
NBAD's loan book grew to Dh182.5bn at the end of September, a year-on-year increase of 10.9 per cent. The bank's non-performing loans (NPLs) increased to AED 6.264bn, equivalent to 3.32 per cent of the loan book. Such a figure was in line with the bank's indication that NPLs should plateau at between 3.5 per cent and 3.75 per cent by the end of the year, the bank said. Total provisions represented 97.6% of NPL.
Customer deposits year-on-year grew 18.5 per cent to Dh229.5bn, driven by net inflows of government deposits.
“Overall, we are well positioned for continued success in the future,” said chief executive Alex Thursby, who took the post in July. “I believe we have the right strategy in place and our challenge going forward will be to execute against that strategy.”
NBAD’s shares fell 2.2 per cent yesterday.The stock has gained 40.5 per cent this year.
jeverington@thenational.ae
