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Tue 29 Jan 2008 10:50 AM

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Market-related income fires NBAD earnings

Abu Dhabi lender posts second-biggest profit ever in Q4, plans regional expansion.

Market-related income fires NBAD earnings

National Bank of Abu Dhabi (NBAD) beat analysts' forecasts on Monday, posting its second-biggest profit ever on stock market-related income, and said it planned to expand in the Middle East, Africa and Asia.

The second-largest UAE lender by market value said net income in the three months to December 31 surged 59% to 744 million dirhams ($203 million).

"The stock markets were kind, with a fair wind blowing in the fourth quarter, which helped the bank's income grow," Chief Executive Michael Tomalin told newswire Reuters by telephone after the state-controlled lender reported its earnings.

"It helped our brokerage and asset management business pick up," he said. NBAD is the largest asset manager in the UAE, with a value in August of about $1.5 billion.

Abu Dhabi's benchmark has risen 28.2%, and Dubai's main index 28.4% since Octtober 1.

Fee and other operating income rose 35% last year, the bank said, without giving quarterly data.

Profit from international operations climbed 6% last year to 354 million dirhams, contributing 14% of total net income. The bank is expanding abroad as competition at home intensifies.

"Our strategy is to grow organically," Tomalin said. "We do not want to pay large amounts of goodwill to companies."

NBAD has applied for a licence to open a representative office in Libya, where it sees long-term potential, he said.

"We are looking at opening an office in Asia this year as part of our wholesale market strategy... In Hong Kong we see a long-term continuity with China," Tomalin said.

The bank also plans to open a branch in Jordan and has applied for a licence to operate in Qatar.

Last year, the bank opened seven branches in Egypt and Oman, and will open a branch in Bahrain before April, it said in the statement.

Analysts' forecasts for fourth-quarter profit ranged from 522 million dirhams to 701 million dirhams, in a Reuters survey last month, with the average of seven forecasts at 600.96 million dirhams.

Net interest income rose 19% last year, said the bank, which recommended a 40% cash dividend and 20% in bonus shares. (Reuters)

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