Monday, Apr 30, 2012

DUBAI (Zawya Dow Jones)--National Bank of Abu Dhabi, the United Arab Emirates' second-biggest bank by assets, is looking to set up offices in India, Indonesia, Brazil, Iraq and possibly South Sudan after opening operations in Malaysia and Shanghai later this year.

Michael Tomalin, NBAD's chief executive, said on a conference call Monday that he expected costs to grow this year by around 10% to 15%, due partly to the bank's intensifying focus on expanding outside of its home market.

"We have applications in hand to set up offices in India, and we're looking to do something in Indonesia, Brazil, Iraq and, subject to conditions there, South Sudan," he said.

Already the bank is planning to open a subsidiary in Malaysia and a representative office in Shanghai in the second quarter. Plans are also in the works to add to the bank's presence in Egypt, Oman, Jordan, Sudan and Bahrain.

The bank might be open to making acquisitions, Tomalin said, but only if it could find a good fit. The primary objective was to grow organically, he said.

The comments come as NBAD's international operations play a bigger role in its financial performance. Operating profit from international banking rose 30% year-on-year in the first quarter, versus a slight fall in operating profit for domestic banking in the same period.

As the bank looks abroad, Tomalin added he expected loan growth this year to be around 10%. Loans and advances reached 163.2 billion U.A.E. dirhams ($44.47 billion) at the end of the first quarter, up 14% on a year before.

Non-performing loans were expected to peak at between 3.5% and 3.75% of the loan book, Tomalin said. At the end of the first quarter, NBAD reported about AED5.1 billion of non-performing loans, a 3.03% ratio.

"We do think there will be a continuing rise in non-performing loans as a percentage of loans but after reaching that point tending to stabilize," Tomalin said.

NBAD last week posted a first-quarter net profit of AED1.04 billion, beating most analyst expectations.

-By Asa Fitch, Dow Jones Newswires, +971 4 446-1685, asa.fitch@dowjones.com

Copyright (c) 2012 Dow Jones & Co.

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30-04-12 1346GMT