National Bank of Abu Dhabi reported a 10.4 percent rise in second-quarter profit, beating analysts’ estimated as the UAE lender boosted income from lending and set aside less money for bad loans.
Net income rose to AED1bn ($272m) from AED906.5m a year earlier, the bank said in an e-mailed statement on Tuesday. That exceeded the median estimate of five analysts for a profit of 920 million dirhams, according to Bloomberg data.
“These are a strong set of results in difficult markets reflecting the resilience and strength of the bank,” chief executive officer Michael Tomalin said in the statement.
UAE banks are recovering from the global credit crisis, which weakened lending and investment banking activity, while provisions for bad loans are rising amid the economic slowdown. UAE economic growth may accelerate to 3.2 percent this year, with oil prices at $85 a barrel, from 1.3 percent in 2009, economy minister Sultan Bin Saeed Al Mansouri said in May.
Second-quarter net interest income advanced 18 percent to 1.2 billion dirhams from a year ago, while free and commission income grew 4 percent to 304.6 million dirhams, the statement said. The bank set aside 238.3 million dirhams as impairment charges compared with 285.9 million dirhams a year earlier.
National Bank of Abu Dhabi, the second-biggest lender in the UAE, is “expected to keep on benefiting from a low-risk profile and a cautious growth strategy to sustain satisfactory profitability levels,” Shuaa Capital said in a report before the results were announced. The bank last month sold 500 million ringgit ($156 million) of Islamic bonds in its first offering of debt in Malaysia.
National Bank of Abu Dhabi has no exposure to state-run Dubai World, the company seeking to alter the terms on $14.4 billion of bank debt, it said in April. It is owed money by Nakheel PJSC and Limitless LLC, Dubai World’s units. Emirates NBD PJSC, the U.A.E.’s biggest bank by assets, reported a 53 percent decline in second-quarter profit yesterday as it set aside money to cover for bad loans including from Dubai World.
National Bank of Abu Dhabi shares fell 0.5 percent to close at 11 dirhams before the results were announced. The stock has dropped 2.4 percent this year, compared with a 5.5 percent drop in the ADX Banks & Finance Index. (Bloomberg)
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