National Bank of Abu Dhabi profit jumps on fee bonanza
Higher lending fees and insurance sales drove a 28 percent rise in National Bank of Abu Dhabi’s fourth quarter profit, the emirate’s largest lender by assets said on Tuesday.
United Arab Emirates banks have been hit over the last two years by a rise in soured loans due to slower economic growth and steeper funding costs caused by intense competition for deposits as a result of lower oil prices.
NBAD, which is merging with First Gulf Bank (FGB), said it made a net profit of 1.33 billion dirhams ($362 million) in the three months ending Dec. 31. This compared to 1.04 billion dirhams in the same period a year earlier.
This was in line with forecasts from three analysts polled by Reuters ahead of the results.
Net fees and commissions rose to 588 million dirhams, up 9 percent from the same period a year before, which the bank said in a statement was primarily driven by higher fees earned on lending and sales of insurance products.
NBAD’s foreign exchange and investment income climbed 69 percent over the period to reach 283 million dirhams. Net impairment charges reached 311 million dirhams, down 29 percent from the corresponding period of 2015.
In December, NBAD secured shareholder approval to merge with FGB. The pair announced in July that their boards had approved the deal, which will create one of the largest banks in the Middle East and Africa with assets of around $175 billion
Earlier this month, NBAD said four of its top managers resigned, confirming an earlier report by Reuters.
The board proposed a cash dividend of 0.45 dirhams per share for the year 2016, the same as the payout for 2015.