Net profit posted for the quarter is AED1,041mn; rises by 12%YoY
Bottom-line fared better than expectations; higher by 10%
Net interest income surges 6%YoY for 1Q12
Non-interest income rises 13%YoY on improving fee income
Provisions drop 14%YoY, coverage at 99%
NPL ratio was recorded at 3.03%; rises by just 9bps
Net loans rise by 2%YTD, deposits jump considerably by 24%YTD
Analyst comments:
NBAD posted a very healthy set of results for 1Q12, growing by 12%YoY on improved top-line and lower provisions. Non-interest income also added value due to higher fee income which was up 11%YoY; forex gains and investment income showed positive growth as well. Loans growth remained low but deposits showed substantial mobilization at 24%QoQ. Provisions were down by 14%YoY since NPL formation was slow; NPL ratio saw an addition of just 9bps during the quarter. All provisions taken were specific in nature as the bank has already met the 1.5% collective provisions requirement and risk weighted assets seemed to have remained stagnant.
We take a positive view on the bank's performance for the quarter. However, such a strong build up in deposits needs to be matched with aggressive loans disbursement, especially if deposits are not zero-cost. This unexpected spike in deposits also triggers the need to speak to the bank in order to assess any changes in their strategy for the year.
Naveed Ahmed, CFA
Senior Financial Analyst
Research Group
Global Investment House
t: (965) 2295-1280
f: (965) 2295-1280
e: nahmed@global.com.kw
w: www.globalinv.net
P.O.Box: 28807 Safat, 13149
Kuwait
© Press Release 2012
