NBAD Reports 2nd Quarter / 1st Half 2016 Results

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National Bank of Abu Dhabi (NBAD) reported net profits of AED 1.376 billion for 2Q’16, up 8% sequentially (q-o-q), resulting from improvements in fee income, driven by continued momentum in Global Wholesale strategic flow products as well as Retail & Commercial outpacing the market. Net profits were down 5% year-over-year (y-o-y), reflecting lower investment gains and higher impairment charges, despite the growth in strategic businesses and overall stronger operating profits.

Expenses were essentially flat both sequentially and y-o-y as the Bank continued to tightly control expenses whilst also investing in talent, operations and infrastructure.

Loans were AED 203 billion, up 2% q-o-q and down 7% y-o-y. Results in both periods included further growth in retail lending offset by declines in Global Wholesale relationship loans. CASA improved 4% on both a q-o-q and y-o-y basis as the Bank continued to attract deposits, particularly from international Wholesale clients and the Government of Abu Dhabi.

In 2Q’16, the Bank continued to build its strong liquidity position and maintain a robust capital position with a Tier-1 ratio of 15.5% as well as strong credit ratings.

Return on equity (RoE) of 13.0% in 2Q’16 marked a sequential improvement of 103bps and continues to be impacted by challenging market conditions.

H.E. Nasser Alsowaidi
Chairman of NBAD

“This has been another strong quarter for NBAD with revenues growing and costs remaining flat. NBAD continues to have a healthy balance sheet, access to diverse sources of funding and a strong liquidity position, meaning the bank is still one of the safest and highly rated in the world.

This set of results strengthens the rationale of the proposed merger with FGB that was announced earlier this month. The combination of these two institutions is an exciting moment for NBAD and I am confident that the merger will allow us to create even more value for our customers, shareholders, investors, employees and the people of the UAE.”

Alex Thursby
Group Chief Executive.

“I am delighted with the performance of NBAD through the second quarter of 2016. Not least, the ongoing transition of revenue towards more diversified and stable sources, which underlines the merits of the strategic shift we are currently going through.

Here in the UAE, our Retail and Commercial business continues to outperform the market, while at the same time maintaining risk and cost discipline. I am particularly pleased to see the investment we have made in our distribution channels, especially e-banking, already coming through in our revenue.

Elsewhere in the bank, our Wholesale business is showing robust growth in strategic flow products with strong momentum in fee generation. The market volatility in the wake of the Brexit vote may have created macroeconomic uncertainty, but we supported our clients through it and saw Global Markets revenue grow 16% on a sequential basis.

“With a potential merger with FGB on the horizon, we are entering a new era for NBAD that will create new opportunities and allow us to serve even more customers with an even greater array of products and services. Ultimately, creating a bigger bank that complements the ambitions of the UAE.”

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