NBAD Earns AED 1.4 Billion Net Profit in Q1

National Bank of Abu Dhabi (NBAD) reported net profits of AED 1.423 billion in Q1’15, up 1% year-over-year and up 4% sequentially. This represents diluted EPS of AED 0.26 for Q1 2015 versus AED 0.25 for Q1 2014.

Underlying revenue growth across our businesses drove growth on a year-over-year basis. Sequentially, lower expenses and improvements in credit quality were offset by lower revenues. Balance sheet growth continued to remain strong with growth in assets driven by a strong uptick in lending and incremental liquidity from higher deposits.

The Bank’s return on shareholder funds (RoSF) of 16.5% in Q1 2015 is in line with the medium-term target of 15%.

H.E. Nasser Alsowaidi, Chairman of NBAD said, “In the first quarter of 2015, NBAD once again delivered strong profits in a challenging environment.The Bank achieved this result whilst maintaining a solid balance sheet and strong capital position. NBAD continued to enhance its position on the global stage as it hosted the 7th Annual Global Financial Markets Forum, which was the most successful GFMF event to date. This year, the roster of global leaders in business, economics and politics was outstanding.

The Bank also continued to improve its position in global markets, becoming the #1 International Sukuk issuer globally during the first quarter of 2015.  Further, the bank continued to climb the rankings in Debt Capital Management, ranking #2 in GCC bonds and #3 in MENA bonds.  

After a very strong performance in 2014, the Bank’s strong first quarter performance signals that NBAD is well positioned for a successful 2015.”

Mr. Alex Thursby, Group Chief Executive said, “I am pleased with our first quarter 2015 performance. We continued to execute against our strategy and made market share gains in many areas including debt capital markets. In particular, I am very proud of our recent number one global ranking in International sukuk issuance.
Our solid, underlying profitable growth came from a range of businesses, and we expect our momentum to accelerate throughout 2015. The momentum in our balance sheet was strong in Global Retail & Commercial and Global Wealth throughout the quarter and picked up late in the quarter within Global Wholesale, which is not fully reflected in our revenues. We also are planning to continue to invest in the business, building the spine of the bank for the future by making investments in technology, infrastructure and people. These investments are critical and will provide the base for growth in the future, and we expect costs to normalise at similar levels for the remainder of the year. Our International revenues and profits experienced strong growth as well, which is in line with our strategy.

We are now in the 2nd year of a 5-year strategy, and I am proud of the progress we have made toward becoming the World’s Best Arab Bank. Our top global rankings in debt capital market league tables and world class credit ratings are indicative of the significant progress we are making. As we continue into 2015, I am confident that we will continue to execute against our strategy and generate returns for shareholders.”

Economic growth forecasts for 2015 and 2016 have recently been revised upwards slightly.  This is driven by several factors, including the decline in oil prices which began at the end of 2014, continued economic strength from the US, India, China and signs of mild growth in Europe.

In 2015, it is becoming apparent that divergent patterns are emerging. In the US, the Fed is expected to increase rates while Emerging Markets and Euro Zone are applying quantitative easing. At the same time, economic growth in advanced countries is lagging behind while Emerging Markets growth is accelerating.

Expectations for 2015 in China and India are strong, although growth in China is likely to be lower than recent double digit growth experienced over the past decade.




Global Wholesale Banking (comprised of Client Relationships, Global Banking and Global Markets) revenue growth remained flat sequentially and grew by 3% year-over-year. Lending picked up late in the quarter and is therefore not fully reflected in the revenues.

Client Relationships, with its deep knowledge of the region and sectoral expertise, continued to raise the level of interactions with clients and was instrumental in winning mandates across the full suite of NBAD products. This momentum was also evident internationally, where the teams were successful in initiating new relationships.

Global Banking had a highly successful quarter in providing best in class financing solutions, financial advisory and transaction banking services. Global Banking participated in some landmark transactions and improved in league table standings in DCM.

Highlights from Q1 2015 include:

  • In Q1 2015, NBAD ranked:
    • #1 in International Sukuks, up from #3 in 2014
    • #2 in GCC Bonds, up from #3 in 2014
    • #3 in MENA Bonds, up from #5 in 2014
  • NBAD served as Joint Bookrunner and Joint Structuring Agent in the first-ever Sukuk financing supported by UKEF for Emirates Airlines.
  • Awarded “Best Structured Trade Finance Solution” by The Asset magazine and “Best Energy Finance Deal of the Year” by Trade & Export Finance Magazine, for the EGPC transaction in 2014.
  • Awarded “Deal of the Year” and “Emerging Asia deal of the Year” by Islamic Finance News Awards for 2014’s debut sukuk issuances by UK and HK governments respectively.

Global Markets performance highlights from Q1 2015 include:

  • Hosted the Global Financial Markets Forum (GFMF), one of the most high profile events in the Middle East that attracted highly distinguished speakers from all over the world and attracted more than 1500 delegates.
  • Continued to widen its range of product offerings to its wholesale clients and executed the first commodity hedge trade and the first Shariah compliant swaption.
  • E-Commerce services of Global Markets were profiled in the e-FOREX January publication, showcasing cutting edge FX Trading capabilities that NBAD offers to its customers.


Global Retail & Commercial delivered strong revenue growth in Q1’15 despite significant margin compression. Q1’15 revenues were down 4% sequentially, but up 6% year-over-year. The growth in Q1 reflects continued strength in retail, commercial and Islamic banking loans and deposits, particularly in the UAE. Sequentially, revenues and profits grew while ongoing investments in branch refurbishments and hiring new talent continued. There were a number of key initiatives in Q1’15, including:

  • Thirteen branches have been reopened in Q1 as part of the branch conversion project.
  • Direct Sales force increased by 280 in UAE in Q1, launched direct sales in Oman, leading to substantial increase in business volumes.
  • International strategy on stream with expatriate programs launched in Egypt and Jordan.
  • Strong growth in commercial program lending driving interest income as well as significant increase in Forex flow income.
  • Strong growth in Retail Islamic financing in Q1’15 compared to Q1’14 reflecting a significant increase in bookings.


Global Wealth delivered solid results in Q1’15, with revenues up 4% compared to Q1’14, but down 12% on Q1’14. The Business’s performance was affected by challenging market conditions in the UAE, which significantly impacted the Custody, Global Asset Management and NBAD Securities businesses.

  • Global Private Banking built momentum with several new product launches, including the FCNR deposit offering.
  • Global Asset Management launched the West-East Corridor Africa Asia equity fund, signed its first Islamic Distributor, and hosted several CIO client events that showcase NBAD’s key investment themes for 2015.
  • NBAD Securities expanded its product offering and now offers Fixed Income and regional equity market trading.
  • Custody’s AUC increased by AED 2.2bn in Q1, and acquired new clients. Custody sponsored the recent Middle East Security Forum and continues to build its network and systems.
  • Wealth won a number of industry awards in Q1, including:
    • “Best Exchange Traded Fund” – MENA Fund Manager
    • “Best New Fund [NBAD Shariah MENA Dividend Leader Fund” - MENA Fund Manager
    • “Best UAE Fund [NBAD UAE Growth Fund] - MENA Fund Manager
    • “Best MENA Fund under $50m [NBAD Islamic MENA Growth Fund]” – MENA Fund Manager
    • “Best Fixed Income Fund [NBAD MENA Bond Fund]” – Banker Middle East UAE Product Awards 2015



Net interest income (including income from Islamic financing) was AED 1,789 million in Q1’15, up 13% y-o-y, but down 6% sequentially. The y-o-y increase was due to higher interest-earning assets, partially offset by margin compression.

Non-interest income was up 4% sequentially, but down 4% y-o-y to AED 894 million in Q1’15.

  • Net fees and commissions for the quarter were AED 517 million, down 16% sequentially and 3% y-o-y.
  • FX and investment income was strong driven mainly by gains from foreign exchange dealings at AED 351 million, up 10% y-o-y and 52% sequentially.
  • Other operating income was AED 26 million.

Net interest margin for Q1’15 was 1.84%, flat y-o-y, but down from 2.00% for Q4’14. NIM compression continues to be a factor, driven by increased competition as well as re-pricing of risk as the economy recovers.


Operating expenses for the quarter were AED 1,014 million, down 9% sequentially and up 29% year-over-year. Expense growth in the quarter was in line with expectations and reflected continued investments in hiring world-class talent, expanding our client service capabilities and enhancing the IT infrastructure of our business to facilitate successful execution of our strategy.

The cost to income ratio was 37.8% for Q1’15 versus 40.3% in Q4’14 and 31.4% in Q1’14.


Net impairment charges continue to reflect improved asset quality, recovery in collateral values and strong risk management processes. Net charges in Q1’15 were AED 170 million, down 15% sequentially and 32% year-over-year. Cost of risk (annualised) was 33bps in Q1’15 versus 40bps in Q4’14 and 54bps in Q1’14.

In Q1’15, the Bank set aside a further AED 99 million as collective provisions on growth in risk-weighted assets. Since the end of 2011, the Bank has been fully compliant with the Central Bank of UAE’s minimum requirement of 1.5% for collective provisions, which has became mandatory as of year-end 2014.


Non-performing loans decreased by AED 205 million in Q1’15 to AED 5,955 million. As of 31 March 2015, NPL ratio stood at 2.88% of the loan book. Total provisions represented 111% of non-performing loans.



  • Assets were AED 400.3 billion at end of Q1’15, up 6% sequentially and up 11% y-o-y. Increase in loans and advances as well as liquid assets drove the growth in balance sheet in the quarter compared to year-end 2014 or end-March 2014.
  • Net Loans and advances were AED 200.2 billion, up 3% sequentially and up 12% y-o-y driven by growth in retail loans as well as corporate & GRE lending in UAE.
  • Customer deposits were 249.8 billion, up 3% sequentially and up 6% y-o-y, including a strong 10% y-o-y growth in CASA.
  • Equity, consisting of shareholders’ funds of AED 33.6 billion and GoAD Tier-I capital notes of AED 4.0 billion, grew by 9% y-o-y to AED 37.6 billion at the end of Q1’15.
  • Basel-II ratios, in accordance with UAE Central Bank’s framework, remain strong and well above the minimum 12% and 8% (Tier-I), with a capital adequacy ratio of 15.5% and a Tier-I ratio of 14.3% as of 31 March 2015.


NBAD’s long term ratings are now amongst the strongest combined ratings of any global financial institution with ratings from Moody’s Aa3, Standard & Poor’s (S&P) AA-, Fitch AA-, RAM (Malaysia) AAA, R&I’s (Japan) rating of A+, and ranked among the World’s 50 Safest Banks by Global Finance.

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