|
Top line operating income up 10% to AED 7.9 Billion
Operating profits up 6.5% to AED 5.3 Billion
Net earnings steady despite substantial provisions
Assets top AED 250 Billion for first time
The National Bank of Abu Dhabi (NBAD) – the Safest Bank in the Middle East* - earned AED 3,708 million in net profits in the year ended 31 December 2011, compared with AED 3,683 million earned in the corresponding period of 2010, representing diluted EPS of AED 1.19 for 2011 compared with AED 1.16 for 2010.
Fourth quarter profit for 2011 was recorded at AED 724 million compared with AED 732 million earned in the fourth quarter of previous year.
The return on shareholders’ funds for the year is 16.3%.
H.E. Nasser Alsowaidi, Chairman of NBAD said: The bank continues to deliver a strong and sturdy performance in the face of continued political and economic uncertainties, regionally and globally. The Group’s business model and its professional management are its core strengths.”
Mr Michael Tomalin, Group Chief Executive, commented: 2011 has been one of the most difficult years ever in global banking. The region has also been affected by the Arab Spring, low interest rates and the Euro crisis. Nonetheless, NBAD has produced solid results with operating profits up 6.5% and top-line revenues up 10%. This year we have been particularly cautious regarding provisions, both for our properties which we had purchased for expansion, and our credit portfolio, taking the general provisions to performing credit risk-weighted assets to the 2014 Central Bank target of 1.5%, and adding appropriate specific provisions for non-performing loans. Despite these higher provisions, net earnings have remained steady; a good achievement in a year when many of our global peers have seen sharp falls in their income.
"Most importantly, our external ratings have been retained and we remain amongst the 50 safest banks in the world and have become the safest bank in the Middle East. None of this could have been achieved without the skills of our people, the support of our customers and our home base in Abu Dhabi.”
OPERATING INCOME
Operating income for the year reached AED 7,881 million, up 9.8% compared with AED 7,179 million for the previous year. Fourth quarter’s operating income at AED 1,991 million is also higher by 9.6% when compared to the fourth quarter of 2010. Net interest income and net income from Islamic financing contracts for 2011 rose 10.6% to AED 5,803 million compared to 2010 while non-interest income was higher by 7.7% at AED 2,078 million.
The net interest margin was 2.48% for 2011, lower than 2.57% for the 2010 due to reduced yields on lending.
EXPENSES
We have continued our organic growth strategy and invested in our network, new markets, talent, brand and systems. Operating expenses for year ended 31 December 2011 were AED 2,564 million, higher by 17.3% compared with the financial year ended 31 December 2010.
The cost to income ratio was 32.5% for 2011 comfortably within the medium-term cap of 35%.
The Bank extended its reach in UAE to 119 offices adding another 7 units in 2011 to its domestic network complemented by over 500 ATM’s. Nine Business Banking centres were opened in 2011 in an ongoing effort to support the vitally important small- and medium-sized enterprises (SMEs) sector. The Bank opened its 2nd branch in Jordan and its 9th branch in Oman, taking its international presence to 51 units across 12 countries at the end of the year. It plans to open its first office in Malaysia and has received the necessary consents to open a representative office in Shanghai in the first quarter of 2012.
OPERATING PROFITS
Operating profits grew by 6.5% to AED 5,317 million in 2011 mainly driven by the international businesses and financial markets businesses, which achieved a growth of 26% and 18.7% year-on-year, respectively. Continued growth in the Bank’s Islamic banking operations and a 5-fold increase in the Global Wealth businesses also contributed to the increase in Group’s operating profits.
IMPAIRMENT CHARGES
Net impairment charges were AED 1,499 million for the full year and AED 482 million for the fourth quarter of 2011. Before recoveries, impairment charges were AED 1,719 million compared with AED 1,360 million in 2010.
Collective provisions of AED 2,321 million now represent 1.5% of the performing credit risk-weighted assets, well ahead of the Central Bank’s 2014 target.
Non-performing loans increased to AED 4,839 million representing 2.94% of the loan book.
An additional charge of AED 89 million for impaired properties has been taken in the quarter, making the total provisions of AED 159 million for the year for impaired properties. Although the Bank owns many properties and land at low historic cost, no revaluation profit has been taken in this or indeed earlier years providing a significant hidden asset for the group.
|
New
Review
Abu Dhabi International Airport - 41°F
