Wednesday, Apr 25, 2012

(This story was originally published Tuesday.)

--1Q net profit up 12% on the year, beats most analyst forecasts

--Says impairment charges decline versus year ago quarter

--NBAD's expansion plans remain on track, says CEO

By Asa Fitch

Of ZAWYA DOW JONES

DUBAI (Zawya Dow Jones)--National Bank of Abu Dhabi (NBAD.AD), the United Arab Emirates' second largest lender by assets, posted a 12% rise in first quarter net profit Tuesday as impairment charges fell and customer deposits surged.

Net profit in the three months to Mar. 31 amounted to 1.04 billion U.A.E. dirhams ($283 million), up from AED927 million in the year ago quarter, NBAD said in an emailed statement.

The quarterly result was slightly ahead of most analysts' forecasts. Cairo-based Beltone Financial predicted AED1.01 billion of net profit for the first quarter, while EFG Hermes estimated AED1.02 billion. HSBC forecast AED941 million of net profit, while Kuwait's Global Investment House predicted AED950 million.

NBAD's net impairment charges were AED313 million for the quarter, down from AED365 million in the same period last year. Non-performing loans, however, rose to 3.03% of all loans versus 2.94% of loans at the end of last year.

Customer deposits, meanwhile, jumped by 23.6% compared to the end of last year to reach AED187.7 billion. Loans and advances rose at a slower 2.3% quarter-on-quarter pace, reaching AED163.2 billion.

"The profits were good, but I think the major surprise was the deposit growth," said Shabbir Malik, a banking analyst at EFG Hermes. The new deposits likely came from government sources, he added, and could be withdrawn in the coming quarters.

As profits and deposits rise, chief executive Michael Tomalin said the bank was executing on growth plans, with two new offices scheduled to open in Asia this year.

"The bank's expansion programs, both at home and abroad, remain on track, and our offices in Malaysia and China are planned to open in the second quarter of this year," he said.

International banking accounted for 16.1% of NBAD's first-quarter operating profit of AED1.38 billion. That business achieved 30% year-on-year growth, the bank said.

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

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

25-04-12 0332GMT