NBAD 2009Q2 profits

[sharewadi]

National Bank of Abu Dhabi (NBAD) 2009 H1 profits announced yesterday (press release in next post). Net profit figure for Q2 not supplied. Will calculate and add summary here later if wanted.

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[sharewadi]

NBAD 2009Q2 results press release below. Note that the Q2 figure is for operating profit, not net profit. Which might mean that Q2 Net Profit is not very good, otherwise they presumably would have highlighted it.

Press Release 28 July 2009:

NBAD H1 net profits reach AED 1.7 billion Q2 operating profits reached a record AED 1.2 billion Abu Dhabi: National Bank of Abu Dhabi’s (NBAD) operating profits for the second quarter of 2009 reached a record AED 1,212 million, 21% up on the first quarter of 2009. First half operating profits reached AED 2,215 million, 7.8% up on the first half of 2008. Net profits, after collective and specific provisions for non performing assets, and overseas taxes, were AED 907 million in the second quarter, up 17.7% on the AED 770 million reported in the first quarter. Half year net profits are AED 1,677 million, 10.6% down on the first half of 2008. In the first half of 2008 total net provisions were AED 145 million; in the first half of 2009 net collective and specific provisions are AED 355 million higher at AED 500 million. Annualised earnings per share were AED1.49 down from AED1.70 for the comparable period of 2008. The Chairman of NBAD, H.E. Nasser Ahmed Khalifa AlSowaidi said, “Despite the prevailing uncertain global market conditions, NBAD achieved good financial results for the second quarter and first half, reflecting the resilience of the Group’s diversified business model and prudent risk policies. The global outlook remains uncertain, but the strong investment in infrastructural projects by the government, is expected to support the economic growth of Abu Dhabi and counter, to some extent, the slowdown in the economy.” Total assets increased 12.3% and 9.4% over the 1st quarter of 2009 and 2nd quarter of 2008 respectively, to reach AED 181 billion. NBAD achieved a return on equity of 22.8% for the first half of 2009, which is in line with the Group's overall plan of 20% for 2009 and medium term ROE of 25%. Customer deposits, including AED 5.6 billion received from ministry of Finance in the last quarter of 2008, showed a healthy improvement of 14.1% quarter-on-quarter and an increase of 25.1% to AED 112 billion compared with 1st half of 2008. Loans and Advances to customers increased by 16.7% over the 1st half of 2008 to AED 124 billion and 7.2% compared with the 1st quarter of 2009. Impaired assets increased by AED 251 million (AED 76 million from the first quarter of 2009) from AED 1,072 million as at 31 December 2008 to AED 1,323 million, on a portfolio of AED 124 billion. This represents 1.1% of the loan portfolio. Net impairment charges for the quarter were AED 286 million of which collective provisions were AED 145 million (charged centrally), specific provisions were AED 160 million, mitigated by net recoveries of AED 19 million. Total provisions increased by AED 274 million in the quarter to reach AED 2,024 million of which AED 1,146 million is collective provisions. The Group has US$7.5 million exposure to the Al Gosaibi group and holds US$3.4 million of a Saad group sukuk on a mark-to-market basis. Cash and balances with Central Bank amounted to AED 14.7 billion, 1.8% up on the 1st quarter of 2009, but 40% down from AED 24.6 billion for the 1st half of 2008, due to excess speculation money in last year’s balances. Capital resources reached AED 21.9 billion, up 30.9% from the corresponding period in 2008 on the back of profit retention and capital injection from the Government of Abu Dhabi in the form of AED 4 billion, Tier I notes. The Tier I capital ratio on Basle II principles is 15.5% on 30 June and capital adequacy is 17.8%. Higher volumes and a widening of margins led to a 35.1% increase in Net Interest Income to AED 2,162 million compared with the 2008 corresponding half year period. Fees, commissions and other non interest income were higher by 71% over the first quarter but lower by 18.9% on the comparable period in 2008, which includes the AED 165 million profit on sale of land. Operating expenses for the 2nd quarter of 2009 were almost unchanged from the first and within our budget and plan, but 27.2% higher than the corresponding 1st half of 2008 as we maintain our investment in skilled and innovative people, continue our organic expansion and upgrade of our network, infrastructure and systems. The Cost income ratio at 28.2% is well within our cap of 35% over the medium-term. Operating profits of AED 2,215 million were delivered by the Group’s divisions for the quarter under review: Domestic Banking (comprising consumer, commercial and elite business) operating profits of AED 412 million represents 18.6% of NBAD’s top-line profits; Financial Markets contributed AED 479 million or 21.6%; International Banking delivered AED 270 million, representing a 12.2% contribution; Corporate and Investment Banking excelled with a 41.5% contribution or AED 919 million. Islamic business contribution was AED 15 million and Global Wealth was AED 12 million, a combined contribution of 1.2%. Head Office, which is run like a business, contributed AED 108 million before any collective provisions which are carried centrally in the Group’s head office account. All NBAD’s superior credit ratings have been affirmed by Moody’s Aa3, Fitch AA- and S&P’s A+. NBAD remains one of the highest rated banks in the region and comparable with many medium sized European banks. NBAD has been rated amongst the world’s safest banks by Global Finance and the best bank in the UAE by Euromoney. Chief Executive Michael Tomalin said, "NBAD’s strong performance in the 1st half of 2009 is attributed to staff dedication and strong leadership within the Group. The global environment remains volatile and challenging but we are confident that our strong franchise and balance sheet will ensure that the Group will weather these turbulent conditions. We remain cautious and maintain our strategies of risk mitigation and business focus to ensure sustainable growth for our stakeholders. We continue to build our capital resources and collective provision to put us in the best possible position for the future.”

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