NBAD H1 net profits rise 58% to Dhs1.876m

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Annualised earnings per share were Dhs1.92 up from Dhs1.24 (restated) in the comparable period of 2007.

The return on equity was 30.1%, above the Bank's medium term strategic plan return of 25%.

In the second quarter the Bank set two records for quarterly profit and total assets.

For the second quarter, net profits at Dhs1,002m were up 72% on the corresponding quarter of 2007 and total assets reached Dhs165bn up 33% on the same period in 2007.

Compared to the same period end in 2007, loans increased 63% to Dhs106bn reflecting, in particular, the demand in Abu Dhabi to finance the substantial growth in the Emirate. Customer deposits were up 15% to Dhs89bn.

Cash and balances with Central Banks reached Dhs24.6bn, reflecting the Bank's dirham liquidity position.

Capital resources, including Dhs3.1bn of subordinated convertible notes, reached Dhs16.7bn, up 38% from the corresponding period in 2007.

Operating income for the 1st half of 2008 was up 61% to Dhs2.7bn including non-interest income of Dhs1.1bn, almost 95% up on the corresponding period in 2007 and reflecting the concentration on diversifying our fee earning sources. Operating expense growth of 44% reflects the planned and continued investment in expanding our network, enhancing our infrastructure, upgrading our systems and our people.

To demonstrate our commitment to our valuable human resources, the Bank introduced an employee share option scheme.

The cost income ratio of 25% in the 1st half of 2008 compares favorably with 28% in the comparable period of 2007, and is well within our medium term cap of 35%.

Domestic banking business was the biggest contributor to the Group's operating profits at 50% with International business, Financial Markets and other businesses contributing 15%, 25% and 3% respectively. Islamic and Private banking businesses are progressing on plan and our real estate subsidiary is expected to commence formal operations in the 4th quarter of this year.

Head office, which is run as a business, contributed 7%.

The Financial Markets business has enjoyed an outstanding first half with profits up 352% on the 2007 comparable.

Total new provisions in the 2nd quarter were Dhs104m of which Dhs69m was new collective impairment provisions mirroring the growth in our loan portfolio and our relatively conservative credit strategy.

Recoveries and writebacks were Dhs31m.

Impaired loans, as at 30 June 2008 were Dhs867m, 116% covered by provisions reflecting our strong asset quality.

NBAD has one of the highest credit ratings in the region comparable with many medium sized European banks. We were the first national bank in the UAE to provide custody service to local and international investors in UAE.

Mr. Michael H. Tomalin, NBAD's Chief Executive said: 'The outstanding first half results reflect the strong performance of all the bank's businesses. NBAD is well positioned to play its part in the on-going Abu Dhabi and UAE growth story.'