National Bank of Abu Dhabi (NBAD) earned net profits of Dh5.296 billion during 2016, up 1.2% year-on-year (y-o-y) as strong underlying performance was partially offset by several macro headwinds, including volatility in financial and currency markets driven by political and economic uncertainties, the Emirates News Agency WAM reported.
Operating profits (profits before impairment and taxes) rose by 5% y-o-y as non-interest income grew in line with the bank’s strategy. Additionally, expenses continued to be tightly managed throughout the year.
The bank maintained its prudent approach to risk management as challenging market conditions persisted in the UAE. Net impairment charges increased 26% y-o-y to Dh1.191 billion, which was in line with guidance provided by management at the beginning of the year.
Liquidity remained strong with loans-to-deposits ratio of 79%, and capital ratios remained robust with a tier-1 ratio of 16.9%.
Fourth quarter profits were Dh1.329 billion. The results were driven by higher revenues, lower expenses and lower impairment charges.
Return on shareholders’ funds was 13.1% in 2016 and 12.9% during the 4Q’16.
NBAD Chairman Nasser Alsowaidi said, “2016 was a solid year for NBAD. The bank generated top and bottom line growth in difficult market conditions and, in doing so, laid the foundations for the transformational merger with FGB.
“In addition to enhancing our revenue generating capabilities and carefully managing expenses, we maintained our strong balance-sheet and capital position, which allowed the bank to consistently deliver value for our shareholders throughout the year.
Merger with FGB
“As ever, our foremost priority in 2016 was meeting the needs of our customers at home and in our international markets. Merging with FGB in the early part of 2017 will bring an even wider range of products, services and opportunities for our customers, and we are grateful to them for their support and patience as we work toward creating the UAE’s champion bank.”
Abhijit Choudhury, Acting Group Chief Executive, said, “From both a full-year and fourth quarter perspective, it has been a good period for NBAD. The bank has performed in line with market expectations and our previous guidance, and we have made significant progress towards our merger with FGB.
“Over the course of the year, we built real momentum in our global wholesale and global retail and commercial businesses, particularly within fee-generating business lines. Combined with our expense discipline, robust capital, strong liquidity and prudent risk management, this momentum has enabled NBAD to deliver strong and steady financial performance.
“Our priority for the year ahead is to bring together NBAD with FGB. Central to that is ensuring our existing customers and those of FGB experience a smooth and transparent integration. Ultimately, this merger will create a stronger bank for the UAE, and our customers will benefit from the best of both banks.”