NBAD 2009Q4 profit AED429m -13%

[sharewadi]

National Bank of Abu Dhabi (NBAD) announced (email about 1230 UAE time) 2009 FY profits of AED 3.020 billion, almost unchanged from 2008 FY profit of AED 3.019 bn (profit was up by 1 million, or less than a tenth of a percent). Earnings per share (EPS) of AED 1.35. Impairment charges for FY 2009 of AED 1.408 billion.

NBAD 2009 Q4 profit announced as AED 429 million, down 13% from AED 492 m in 2008 Q4. Provisions of AED 623m were taken in 2009 Q4.

Proposed dividends of 10% cash and 10% share, subject to approval.
Annual General Meeting (AGM) date scheduled for 15 March 2010.
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[sharewadi]

Press release today from National Bank of Abu Dhabi. Financial statements not supplied. The ADX and ESCA websites might have them later, or tomorrow, or something.

Press Release 01 February 2010:

NBAD's earnings continue its positive trend Net Profit flat at AED 3,020 million Top line operational profits up by 18% to AED 4.5 billion Fourth quarter operating profits up by 18% to AED 1,070 million Abu Dhabi: National Bank of Abu Dhabi (NBAD) reported flat net profits of AED 3,020 million for the financial year ending 2009 (AED 3,019 million in 2008). Diluted earnings per share were AED 1.35 per share compared with AED 1.37 in 2008. This profit was achieved after taking substantial collective provisions and despite the past year’s credit and liquidity challenges. Net impairment charges for the full year were AED 1,408 million of which collective provisions were AED 756 million, specific provisions and write-off charges were AED 797 million, mitigated by recoveries of AED 145 million. Although no properties have been revalued from original cost – and being a 40 year old bank there are many legacy buildings – we have taken an impairment of AED 37 million in respect of recently acquired land for our own use. Collective provisions of AED 1,604 million represents 1.25% of credit risk weighted assets. Impaired assets increased by AED 615 million for the full year totalling AED 1,687 million. The non-performing loans ratio stood at 1.25%, specific and general provisions taken together cover 158% of impaired assets. Risk management strategies are in place to manage risk and contain losses. Successful measures include the improvement in collections, while close monitoring of arrears and customised credit programmes to assist customers are also proving effective. Top line fourth quarter operating profits were AED 1,070 million, up 18.3% on the AED 904 million earned in the fourth quarter of 2008. Net profits in the fourth quarter were AED 429 million, 13% lower than the AED 492 million earned in the fourth quarter of 2008. This profit is after taking AED 623 million of provisions of which AED 316 million were collective provisions. The return on equity for the year is 20% realising our target for 2009. NBAD’s medium term strategic objective is to maintain an average return of 25% over the full economic cycle. Commenting on the results the Chairman, H E Nasser Ahmed Khalifa Alsowaidi said, ''I am pleased with NBAD’s profits which were achieved in extremely difficult local and international operating conditions. The Group’s business model and its businesses once again proved their resilience.” Total assets at the end of 2009 reached AED 197 billion, 19.6% higher than at the end of 2008. Customer deposits rose from AED 103 billion at the end of 2008 to AED 121 billion at the end of 2009, a growth of 17.1%. Customer loans grew from AED 112 billion to AED 132 billion for the same period, a growth of 18.3%. The Bank's capital position remains strong. Capital and reserves, including the convertible subordinated debt, at the end of 2009 were AED 23.3 billion, 34% up on the AED 17.4 billion at the end of 2008. Total capital adequacy ratio on Basel II principles in 2009 rose to 17.4% from 15.4% in 2008 and the Tier I capital was up from 12.6% to 14.9%. Tier I capital was enhanced during 2009 by the capital injection of AED 4 billion capital notes from the Abu Dhabi government in March 2009, to reach AED 20.4 billion at the year end. The classical total assets to capital resources ratio was 8.5 times at year-end; one of the best ratios amongst internationally active banks. Improved margins and good funding cost management led to a 26.7% improvement in net interest income of AED 4,571 million for the 2009 financial year compared with AED 3,608 million for 2008. Operating profits, before provisions and taxes, increased 18.2% for the year to AED 4,501 million. Operating income increased 20.7%, to AED 6,399 million, and costs grew 27.1% to AED 1,898 million. The growth in costs are in line with the 2009 budget as NBAD continued its international expansion with the opening of the Hong Kong branch and the imminent opening of the Jordan branch as well as broadening its franchise in the UAE. The cost to income ratio rose to 29.7% at the end of 2009 in line with NBAD’s objective to remain within 35% over the medium-term and compares favourably with international banks. The provision for taxes on overseas earnings rose by AED 1 million to AED 73 million in 2009. The Group’s main businesses performed well in 2009 despite difficult global and domestic operating conditions. Domestic Banking’s earnings were AED 912 million, contributing 20.3% of the AED 4.5 billion top line operating profits. Financial Markets Division’s earnings were AED 691 million, a contribution of 15.4% and Corporate & Investment Banking’s contribution totalled AED 2,133 million or 47.4%. International Banking’s earnings were AED 546 million accounting for 12.1% of operating profits. Global Wealth had another disappointing year, given the adverse financial markets, with operating profits of AED 15 million. Islamic Banking’s activities earned an excellent AED 59 million, contributing 1.3% to operating profits. Head Office, which runs as a business, reflected a 3.2% contribution at AED 145 million for 2009. Chief Executive, Michael H Tomalin, said "Despite difficult market conditions and flat net earnings in 2009, NBAD achieved a 20% return on equity for its shareholders. At the same time NBAD has built a collective provision of 1.25% of its credit risk weighted assets, invested in its franchise and network, provided adequately for specific impaired loans, hired new talent and improved its IT. Although we expect 2010 to be another difficult year for banking, NBAD is well positioned to invest and grow organically.” The Board of Directors will recommend to shareholders at the AGM, scheduled to be held on the 15 March 2010, a 10% cash dividend and 10% stock dividend for the financial year 2009. These results are subject to approval from the Central Bank of the UAE and shareholders at the Annual General Meeting.

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