National Bank of Abu Dhabi (NBAD) has reported a net profit of Dh1.423 billion ($387 million) in the first quarter of the year, marking an increase of 1 per cent year-over-year.

This represents diluted EPS of Dh0.26 for Q1 2015 versus Dh0.25 for Q1 2014, the bank said in a statement.

Underlying revenue growth across businesses drove growth on a year-over-year basis.  Sequentially, lower expenses and improvements in credit quality were offset by lower revenues, it said.

Balance sheet growth continued to remain strong with growth in assets driven by a strong uptick in lending and incremental liquidity from higher deposits.

The bank’s return on shareholder funds of 16.5 per cent in Q1 2015 is in line with the medium-term target of 15 per cent, said Nasser Alsowaidi, chairman of NBAD.

“In the first quarter of 2015, NBAD once again delivered strong profits in a challenging environment.  The bank achieved this result whilst maintaining a solid balance sheet and strong capital position,” Alsowaidi said.

“NBAD continued to enhance its position on the global stage as it hosted the 7th Annual Global Financial Markets Forum, which was the most successful GFMF event to date.  This year, the roster of global leaders in business, economics and politics was outstanding.

“The bank also continued to improve its position in global markets, becoming the #1 International Sukuk issuer globally during the first quarter of 2015.  Further, the bank continued to climb the rankings in Debt Capital Management, ranking #2 in GCC bonds and #3 in Mena bonds.

“After a very strong performance in 2014, the Bank’s strong first quarter performance signals that NBAD is well positioned for a successful 2015,” he added.

Alex Thursby, group chief executive said: “I am pleased with our first quarter 2015 performance.  We continued to execute against our strategy and made market share gains in many areas including debt capital markets.  In particular, I am very proud of our recent number one global ranking in International sukuk issuance.”

“Our solid, underlying profitable growth came from a range of businesses, and we expect our momentum to accelerate throughout 2015.  The momentum in our balance sheet was strong in Global Retail & Commercial and Global Wealth throughout the quarter and picked up late in the quarter within Global Wholesale, which is not fully reflected in our revenues.

“We also are planning to continue to invest in the business, building the spine of the bank for the future by making investments in technology, infrastructure and people,” he added.

“These investments are critical and will provide the base for growth in the future, and we expect costs to normalise at similar levels for the remainder of the year. Our International revenues and profits experienced strong growth as well, which is in line with our strategy,” Thursby said.
“We are now in the second year of a five-year strategy, and I am proud of the progress we have made toward becoming the World’s Best Arab Bank.  Our top global rankings in debt capital market league tables and world class credit ratings are indicative of the significant progress we are making.  As we continue into 2015, I am confident that we will continue to execute against our strategy and generate returns for shareholders.”

ECONOMIC OVERVIEW

Economic growth forecasts for 2015 and 2016 have recently been revised upwards slightly.  This is driven by several factors, including the decline in oil prices which began at the end of 2014, continued economic strength from the US, India, China and signs of mild growth in Europe.

In 2015, it is becoming apparent that divergent patterns are emerging.  In the US, the Fed is expected to increase rates while Emerging Markets and Euro Zone are applying quantitative easing, the statement said.

Assets were Dh400.3 billion at end of Q1, up 6 per cent sequentially and up 11 per cent y-o-y. Increase in loans and advances as well as liquid assets drove the growth in balance sheet in the quarter compared to year-end 2014 or end-March 2014.

Net Loans and advances were Dh200.2 billion, up 3 per cent sequentially and up 12 per cent y-o-y driven by growth in retail loans as well as corporate & GRE lending in UAE.

Customer deposits were Dh249.8 billion, up 3 per cent sequentially and up 6 per cent y-o-y, including a strong 10 per cent y-o-y growth in CASA. – TradeArabia News Service