The National Bank of Abu Dhabi (NBAD) reported a 12 per cent increase in net profits to Dh1,041 million for the quarter ended March 31, 2012 compared with Dh927 million in the corresponding quarter of 2011.
Net profits increased by 44 per cent over the fourth quarter of 2011.
The annualised return on shareholders' funds for the quarter is 17.2 per cent in line with the targets for 2012 and the medium-term.
Nasser Al Sowaidi, chairman of NBAD, said, "Regional and global uncertainties continue to have an overhang on business sentiments and growth. Despite this, NBAD continues to perform well, investing in its franchise, systems and most importantly, in its people. The solid foundation that has been built over the years provides a firm footing to explore new horizons and achieve ambitious targets in the decade to follow."
Michael Tomalin, Group Chief Executive, said: "The first quarter result has got the group off to a strong start for the year in what remains a generally difficult market for banking. Our deposits rose sharply this quarter but core deposits grew more steadily. The liquidity of the group remains strong and loan balances continue to grow at round Dh1 billion per month. The bank's expansion programmes, 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."
Operating income for the quarter reached Dh2,030 million, up 7.9 per cent compared with Dh1,881 million for the corresponding quarter in the previous year. Net interest income and net income from Islamic financing contracts for the first quarter of 2012 rose 5.9 per cent to Dh1,460 million as compared to the first quarter of 2011 while non-interest income was higher by 13.3 per cent at Dh570 million.
The net interest margin was 2.14 per cent for the quarter, lower than 2.48 per cent for the corresponding quarter in 2011 due to increase in short-dated secured lending and maintaining a liquid balance sheet. Loans and advances comprise only 56 per cent of total assets as at 31 March 2012, lower than last year's average of 63 per cent.
Operating expenses for the quarter were Dh645 million, higher by 14 per cent compared with the corresponding period.
The cost to income ratio was 31.8 per cent for the first quarter of 2012. This is lower than the 32.5 per cent recorded for the year 2011 and remains below the group's medium-term cap of 35 per cent.
Tomalin added: “During the quarter, we expanded our domestic presence to 122 branches and cash offices and 529 ATMs. Our global headcount increased to 5,812 staff as on 31 March 2012."
Operating profits in the first quarter of 2012 grew by 5.2 per cent to Dh1,384 million over the corresponding quarter of 2011, mainly driven by the international businesses and financial markets businesses, which achieved a growth of 30 per cent and 15 per cent year-on-year, respectively.
New products, clients and assets under management (AUMs) coupled with some recovery in capital market activities enabled global wealth businesses to triple its operating profits to Dh29 million from Dh10 million in the previous year.
Collective provisions of Dh2,320 million represent 1.5 per cent of the performing credit risk-weighted assets (Central Bank's 2014 target - 1.5 per cent).
Non-performing loans increased to Dh5,100 million representing 3.03 per cent of the loan book.
Total assets were Dh289.3 billion as at 31 March 2012, 13.2 per cent up on 31 December 2011 and 23.9 per cent up on 31 March 2011. Loans and advances to customers were Dh163.2 billion, up 2.3 per cent on 31 December 2011 and 14 per cent up on 31 March 2011.
Customer deposits at Dh187.7 billion grew strongly by 23.6 per cent in the first quarter of 2012 and were higher by 33.1 per cent as compared to 31 March 2011.
Capital resources stood at Dh35.1 billion after dividend payments of Dh120 million on Government of Abu Dhabi (GoAD) Tier-I capital notes and Dh861 million to shareholders as a cash dividend for 2011. Capital resources consist of shareholders' funds of Dh23.1 billion, GoAD Tier-I capital notes of Dh4.0 billion and subordinated convertible notes of Dh8.0 billion.
Capital adequacy ratios (Basle-II) remain well above the minimum 12 per cent required by the UAE Central Bank and (prospective) Basle-3 with a capital adequacy ratio of 20.6 per cent and a Tier-I ratio of 15.8 per cent as at 31 March 2012.