NBAD reports 3rd quarter 2004 earnings

Annualised earnings per share were AED11.37, 35% above the corresponding period of 2003. The annualised return on equity reached 24% compared with 20.4% in 2003.

For the third quarter, net profits were up 50% on the corresponding quarter of 2003 reflecting strong performances in all divisions and increased recoveries. "The strength of the local stock market contributed to exceptional results in the bank's asset management and stock exchange businesses", commented Michael Tomalin, Chief Executive of NBAD.

Total assets reached AED49.6 Billion at the end of the 3rd quarter of 2004, up 11% over the same period for 2003, with customer deposits and loans up 11% and 20% respectively. Shareholders' equity reached AED4.86 Billion.

Operating income for the first three quarters of 2004 was AED1,167M including non-interest income of AED479M, up 28% on the corresponding period in 2003. Income rose 24% year on year, outpacing the expense growth of 14%, resulting in the cost-income ratio improving from 31.6% in the first three quarters of 2003 to 29.1% in the same period of 2004.

Year on year, Domestic Banking profits were up 13%, International Banking 46% and Investment Banking 75%. In International Banking, higher recoveries contributed to the increased profits. Investment Banking, which contributed 23% to operating profits in the first three quarters, benefited from active and rising local stock markets. Head office, which is run like a business, did well with underlying profit up 10%.

Impaired asset provisions net of recoveries were significantly lower in the 3rd quarter due to an exceptionally large recovery of an impaired international debt. Overall, provisions reflect our relatively conservative credit strategy and improving asset quality.

NBAD, for the second time, won the prestigious "UAE Bank of the Year" award instituted by the Banker magazine. Earlier in the year, the Bank won Sheikh Khalifa Excellence Gold Award and Dubai Quality Award.

Looking forward, Mr Tomalin said, "These first class results are above trend line. We manage the bank to produce an upper quartile return on equity of 20%, at a cost-income ratio of 35%, over the economic cycle, and these results are much better than that".