DUBAI: National Bank of Abu Dhabi, the largest lender by market value in the United Arab Emirates, fell short of analysts' forecasts with a 15.8 percent increase in second-quarter net profit on Tuesday.
Banks in the Gulf state are reporting strong improvement in the second-quarter thanks to an economic recovery and lower provisioning for exposure to state-linked entities.
Dubai's biggest bank Emirates NBD beat expectations with a 50 percent jump in profit on Monday.
NBAD, almost 70-percent owned by Abu Dhabi's government, made a net profit of 1.21 billion dirhams or $329.4 million in the three months to June 30, up from 1.05 billion dirhams in the corresponding period of 2012, the bank said in a statement.
Analysts, however, had on average forecast a net profit of 1.29 billion dirhams for the quarter in a Reuters poll.
NBAD's quarterly profit rise was attributed to higher non- interest and net interest income, with the latter gaining 9.6 percent year-on-year in the second quarter.
Net fee and commissions income for the quarter rose 23.5 percent to 476 million dirhams.
Net impairment charges in the second quarter rose slightly year-on-year to 301 million dirhams.
Net profit for the first half of the year rose 25.6 percent to 2.62 billion dirhams.
Such a jump was expected after the bumper 35.5 percent rise in first-quarter net profit.
NBAD noted that loan-to-deposit ratios in the UAE banking system were at their lowest in several years, due to the abundant liquidity and the modest growth in lending.
The bank was boosted by further government deposits in the second quarter, with deposits growing 15.3 percent in the first six months of 2013 to 219.4 billion dirhams.
By contrast, lending grew just 5.4 percent in the opening half of the year to 173.5 billion dirhams.
Alex Thursby assumed the CEO role at NBAD on July 1, taking over from Michael Tomalin, who retired after 14 years in charge.
Thursby was previously chief executive for international and institutional banking at Australia and New Zealand Banking Group.
Thursby said his first few weeks at the bank had been spent formulating a five-year plan for the bank, with details to be communicated to shareholders in the coming months.
Under Tomalin, NBAD had pursued organic growth, particularly in Asia, to offset greater competition in its home market.
Given Thursby was behind ANZ's drive into Asia, there wasn't expected to be a great shift in the bank's strategy under the new head.
Shares of NBAD didn't trade on Tuesday but are up 42 percent year-to-date as part of a wider rally on the Abu Dhabi bourse.
The stock is at its highest level since January 2006. (Reuters)
