NBAD CEO Alex Thursby won't be part of merged banks' leadership

UAE bank NBAD said its expects low single-digit revenue, earnings growth in 2016
NBAD CEO Alex Thursby won't be part of merged banks' leadership
Alex Thursby, CEO of National Bank of Abu Dhabi. (NBAD)
By Reuters
Thu 28 Jul 2016 09:41 AM

NBAD Chief Executive Alex Thursby has said that he will not be part of the leadership of the bank created after the merger of NBAD and rival First Gulf Bank (FGB).

Merging NBAD and FGB, as recommended by the boards of the two lenders, will create one of the largest banks by assets in the Middle East and Africa.

Speaking during a conference call on Wednesday, Thursby said he would not be part of the banks' leadership when the merger is completed in the first quarter of 2017.

Thursby was appointed Group CEO of NBAD on July 1, 2013, joining the lender from ANZ Bank where he was CEO of International and Institutional Banking. Prior to that, he was with Standard Chartered Bank for 21 years, working in various functions.

Chief Financial Officer James Burdett said NBAD expects low single-digit revenue and earnings growth for 2016.

The bank posted a 4.8 percent fall in second-quarter net profit on Wednesday, broadly in line with forecasts.

National Bank of Abu Dhabi and First Gulf Bank, in merger talks to create one of the largest banks in the Middle East and Africa, both reported lower profits on Wednesday, reflecting challenging conditions in the UAE.

The results bring to a close a generally tepid earnings season for the Gulf state's banks, with many struggling under the weight of higher defaults and sluggish credit growth.

Much of the weaker performance, particularly in oil-rich Abu Dhabi, stemmed from reduced government spending as a result of lower oil prices.

National Bank of Abu Dhabi (NBAD), the emirate's largest lender by assets, said its second-quarter net profit fell 4.8 percent to 1.38 billion dirhams ($376 million) in the three months through June.

That was broadly in line with forecasts in a Reuters' survey of analysts.

Impairments booked during the quarter leapt 79.2 percent from a year ago to 298 million dirhams, "driven by a challenging operating environment and prudent provisioning," the bank said in a statement said.

NBAD's loan book shrank 1.5 percent to 202.9 billion dirhams by June 30, versus 205.9 billion dirhams at the end of December 2015 as the bank reduced its trade finance.

"There's a slower growing market generally. Growth in the loan market in the UAE will be slow," Chief Executive Alex Thursby said on a media conference call.

That trend is likely to continue with NBAD forecasting relatively modest growth for the rest of the year.

"We expect low single-digit revenue and earnings growth," Chief Financial Officer James Burdett said on the same conference call.

However, Thursby said he was bullish on revenue growth in non-interest income as well as from the bank's international business.

The merger of NBAD and FGB, recommended by the boards of the two lenders earlier this month, is expected to be completed in the first quarter of 2017.

FGB, the UAE's third-largest lender by assets, broadly met estimates as it posted a 10 percent fall in second-quarter net profit to 1.31 billion dirhams.

Net interest and Islamic financing income during the period edged down 3 percent, while impairments jumped by 54 percent to 398 million dirhams.

The bank's loans and advances stood at 153.8 billion dirhams at the end of June, up 3 percent from the same period of 2015.

 

 

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