MENAFN - Khaleej Times
UAE- NBAD net profit hits $1b as deposits surge
(MENAFN - Khaleej Times) The National Bank of Abu Dhabi (NBAD), the UAE's second largest bank by market value, on Tuesday reported 22 percent growth in net profits for 2010 as deposits grew and asset quality improved despite tough economic conditions in the wake of global financial crisis.
The bank, which announced about 400 million exposure to Egyptian entities, said its net profit increased to Dh3.683 billion (1.01 billion) in 2010 from Dh3.020 billion in 2009. The bank's profit crossed 1 billion mark for the first time.
Net profits for the fourth quarter of 2010 increased 71 percent to Dh732 million (199 million) from Dh429 million in the same quarter of 2009, the bank said in a statement.
"Global economic activity continued to recover in 2010 supported by accommodative monetary and fiscal policy around the world. Economic activity in the UAE rebounded modestly reflecting global trends.
NBAD continues to perform strongly in a subdued and still challenging local and international operating conditions," Nasser Alsowaidi, Chairman of NBAD, said. The banks total assets reached Dh211.4 billion as at December 31, 2010, reflecting an increase of 7.4 percent. Deposits rose 6.5 percent to Dh123.1 billion while loans and advances to customers increased by 3.5 percent to Dh136.8 billion compared with Dh132.3 billion in 2009.
Operating income for the full year 2010 reached Dh7.2 billion, 12.2 percent 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 percent to Dh5.2 billion. Operating expenses for the financial year 2010 increased by 15.2 percent to Dh2.186 billion, the bank statement said.
"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 percent increase in net profits, which, for the first time in the history of NBAD, reached the equivalent of 1 billion," Michael Tomalin, Group Chief Executive, said. Provisions for the year shrank to Dh1.21 billion from Dh1.41 billion in 2009, the bank said. Non-performing loans rose to 2.3 percent of overall loans, from 1.3 percent at the end of 2009.
The diluted earnings per share rose to Dh1.40 for 2010 compared with Dh1.18 in 2009. NBAD shares rose 0.4 percent to Dh11.50 on the Abu Dhabi bourse on Monday. The shares, which did not trade on Tuesday, have fallen 2.1 percent this year.
UAE banks are recovering from the global credit crisis, which weakened lending and investment banking, while provisions for bad loans are continuing to rise. Abu Dhabi Commercial Bank PJSC, the UAE's third-biggest bank by assets, last week reported a fourth-quarter profit of Dh371 million after a loss in the year-earlier period. Emirates NBD PJSC, the UAE's biggest bank, is yet to report earnings for the period.
By Muzaffar Rizvi
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