NBAD reports first half earnings

Annualised EPS of AED10.69, represent a 28% increase over the corresponding period of 2003. The annualised return on equity reached 23.6% compared with 20.75% in the 1st half of 2003.

For the second quarter, net profits at AED287M, were up 34% on the corresponding quarter of 2003 and 33% up on the first quarter of 2004.

Total assets reached AED48.8 Billion at the end of the first half of 2004, up 21% over the same period for 2003, with customer deposits up 20%. Shareholders' equity reached AED4,475 Billion.

"The bank's performance was outstanding this quarter driven by all our businesses," said Michael H Tomalin, Chief Executive of NBAD. "Our commitment remains to develop the bank along the lines clearly set out in our long term plans: focus on the customer, develop our people and reward our shareholders," added Mr Tomalin.

Operating income for the 1st half of 2004 was AED765M including non-interest income of AED317M, which was 26% above the corresponding period in 2003, reflecting our concentration on earning fees. Operating income rose 23% year on year, outpacing the expense growth of 16%, which resulted in the cost income ratio improving from 30.8% in the first half of 2003 to 29.2% in the first half of 2004.

Over the first half of 2003 Domestic banking profits were up 10%, International banking 13% and Investment banking 49% Investment Banking profit figure was sharply influenced by the excellent performance of the UAE stock market, our UAE funds and our stock broking subsidiary, Abu Dhabi Financial Services LLC. Head office, which is run like a business, did well despite low rates of interest, which adversely affect the risk free return available on the capital in Head Office.

Net impaired asset provisions were AED22M in the first half of 2004 against AED25M for the same period in 2003. Overall, provisions are modest in comparison with the size of the Bank's business and reflect our relatively conservative credit strategy.

NBAD's commitment to quality and business excellence initiatives received formal recognition by winning the Sheikh Khalifa Excellence Gold Award.