National Bank of Abu Dhabi said its first quarter net income grew almost 1 per cent, missing analysts expectations as low interest rates coupled with intensifying competition and an increase in costs hit profits.
Net income increased to Dh1.42 billion in the first three months of 2015 from Dh1.41bn in the same time frame last year, the bank said. Revenues gained 7 per cent to Dh2.68bn from Dh2.5bn. Operating expenses grew 28 per cent year-on-year in the first quarter to Dh1.01bn from Dh789 million last year as the bank spent more on technology and hiring.
“These are good financial results in the context that the market is a little bit tougher at home but the way that we want to grow the business, that is growing,” Alex Thursby, the bank’s chief executive, told reporters on a conference call after the results were released.
“What’s very pleasing is that our pillar one, retail and commercial, had a very good quarter and we see that as continuous strength going forward.”
Net interest margin was unchanged year-on-year at 1.84 per cent, but slipped 12 basis points from 1.96 per cent in the fourth quarter. Still, customer loans grew 12.1 per cent to Dh200.2bn at the end of March compared to Dh178.5bn at the end of March last year.
Five analysts polled by Reuters forecast an average net profit of Dh1.49bn for the quarter.
“Earnings missed expectations mainly because of tighter net interest margins,” said Shabbir Malik, a Dubai-based bank analyst at the Egyptian investment bank EFG Hermes.
“The key thing for me was that loan growth was quite healthy and provisioning came in better than expected. That suggests to me that credit appetite is still intact and credit quality isn’t showing signs of stress.”
UAE banks registered record high profits in the past couple of years as the UAE's economy recovered from the financial crisis of 2008. But banks are focusing more on making money from higher-yielding individual customers and small and medium-sized enterprises in the aftermath of the oil price slump.
That is because government corporations sensitive to oil price fluctuations may not have a big appetite for tapping debt. Lenders are also beefing up their fee-generating businesses such as trade finance, wealth management and securities brokerage.
mkassem@thenational.ae
Follow The National's Business section on Twitter
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Titanium Escrow profile
Started: December 2016
Founder: Ibrahim Kamalmaz
Based: UAE
Sector: Finance / legal
Size: 3 employees, pre-revenue
Stage: Early stage
Investors: Founder's friends and Family
PREMIER LEAGUE FIXTURES
Saturday (UAE kick-off times)
Watford v Leicester City (3.30pm)
Brighton v Arsenal (6pm)
West Ham v Wolves (8.30pm)
Bournemouth v Crystal Palace (10.45pm)
Sunday
Newcastle United v Sheffield United (5pm)
Aston Villa v Chelsea (7.15pm)
Everton v Liverpool (10pm)
Monday
Manchester City v Burnley (11pm)
Mobile phone packages comparison
The specs: 2018 Nissan Patrol Nismo
Price: base / as tested: Dh382,000
Engine: 5.6-litre V8
Gearbox: Seven-speed automatic
Power: 428hp @ 5,800rpm
Torque: 560Nm @ 3,600rpm
Fuel economy, combined: 12.7L / 100km
The specs: 2018 Mercedes-Benz S 450
Price, base / as tested Dh525,000 / Dh559,000
Engine: 3.0L V6 biturbo
Transmission: Nine-speed automatic
Power: 369hp at 5,500rpm
Torque: 500Nm at 1,800rpm
Fuel economy, combined: 8.0L / 100km
Company%20profile
%3Cp%3EName%3A%20Tabby%3Cbr%3EFounded%3A%20August%202019%3B%20platform%20went%20live%20in%20February%202020%3Cbr%3EFounder%2FCEO%3A%20Hosam%20Arab%2C%20co-founder%3A%20Daniil%20Barkalov%3Cbr%3EBased%3A%20Dubai%2C%20UAE%3Cbr%3ESector%3A%20Payments%3Cbr%3ESize%3A%2040-50%20employees%3Cbr%3EStage%3A%20Series%20A%3Cbr%3EInvestors%3A%20Arbor%20Ventures%2C%20Mubadala%20Capital%2C%20Wamda%20Capital%2C%20STV%2C%20Raed%20Ventures%2C%20Global%20Founders%20Capital%2C%20JIMCO%2C%20Global%20Ventures%2C%20Venture%20Souq%2C%20Outliers%20VC%2C%20MSA%20Capital%2C%20HOF%20and%20AB%20Accelerator.%3Cbr%3E%3C%2Fp%3E%0A
Mohammed bin Zayed Majlis
IF YOU GO
The flights: FlyDubai offers direct flights to Catania Airport from Dubai International Terminal 2 daily with return fares starting from Dh1,895.
The details: Access to the 2,900-metre elevation point at Mount Etna by cable car and 4x4 transport vehicle cost around €57.50 (Dh248) per adult. Entry into Teatro Greco costs €10 (Dh43). For more go to www.visitsicily.info
Where to stay: Hilton Giardini Naxos offers beachfront access and accessible to Taormina and Mount Etna. Rooms start from around €130 (Dh561) per night, including taxes.
The Prison Letters of Nelson Mandela
Edited by Sahm Venter
Published by Liveright
The specs: 2018 Renault Koleos
Price, base: From Dh77,900
Engine: 2.5L, in-line four-cylinder
Transmission: Continuously variable transmission
Power: 170hp @ 6,000rpm
Torque: 233Nm @ 4,000rpm
Fuel economy, combined: 8.3L / 100km