NBAD Reports 4Q / FY 2016 Results

Continued Solid Performance in Challenging Environment

  • FY’16 Net Profits of AED 5.296 Billion, up 1% y-o-y
    Q4’16 profits of AED 1.329 Billion, up 28% y-o-y
  • FY’16 Revenues of AED 10.808 Billion
    Continued underlying strength in Retail & Global Wholesale flow products
  • Disciplined Expense Management continues
    Positive JAWS of 4% in FY’16 and 10% y-o-y in 4Q’16
  • Customer Loans of AED 201 Billion: down 3% y-o-y, down 2% q-o-q
  • Customer Accounts & Other Deposits of AED 253 Billion: up 8% y-o-y, up 4% q-o-q
  • Liquidity & Capital ratios improved further in 4Q’16
    Loans to Deposit ratio of 79%; Tier-1 capital ratio of 16.9%
  • Board of Directors propose cash dividend of 45% (45 fils per share)

National Bank of Abu Dhabi (NBAD) reported net profits of AED 5.296 billion for FY’16, up 1.2% year-over-year (y-o-y) as strong underlying performance was partially offset by several macro headwinds, including volatility in financial and currency markets driven by political and economic uncertainties.

Operating profits (profits before impairment and taxes) rose by 5% y-o-y as non-interest income grew in line with the Bank’s strategy. Additionally, expenses continued to be tightly managed throughout the year.

The Bank maintained its prudent approach to risk management as challenging market conditions persisted in the UAE. Net impairment charges increased 26% y-o-y to AED 1.191 billion, which was in line with guidance provided by management at the beginning of the year.

Liquidity remained strong with Loans-to-Deposits ratio of 79%, and capital ratios remained robust with a Tier-1 ratio of 16.9%.

Fourth quarter profits were AED 1.329 billion, up 1% sequentially (q-o-q( and 28% )y-o-y ); Y-o-Y results were driven by higher revenues, lower expenses and lower impairment charges.

Return on Shareholders’ Funds (RoSF) was 13.1% in FY’16 and 12.9% for 4Q’16.


H.E. Nasser Alsowaidi, Chairman of NBAD, said: “2016 was a solid year for NBAD. The bank generated top and bottom line growth in difficult market conditions and, in doing so, laid the foundations for the transformational merger with FGB.

In addition to enhancing our revenue generating capabilities and carefully managing expenses, we maintained our strong balance sheet and capital position, which allowed the bank to consistently deliver value for our shareholders throughout the year.

As ever, our foremost priority in 2016 was meeting the needs of our customers at home and in our international markets. Merging with FGB in the early part of 2017 will bring an even wider range of products, services and opportunities for our customers, and we are grateful to them for their support and patience as we work toward creating the UAE’s champion bank.”

Abhijit Choudhury, Acting Group Chief Executive, said: “From both a full-year and fourth quarter perspective, it has been a good period for NBAD. The bank has performed in line with market expectations and our previous guidance, and we have made significant progress towards our merger with FGB.

Over the course of the year, we built real momentum in our Global Wholesale and Global Retail and Commercial businesses, particularly within fee-generating business lines. Combined with our expense discipline, robust capital, strong liquidity and prudent risk mangement, this momentum has enabled NBAD to deliver strong and steady financial performance.

Our priority for the year ahead is to bring together NBAD with FGB. Central to that is ensuring our existing customers and those of FGB experience a smooth and transparent integration. Ultimately, this merger will create a stronger bank for the UAE, and our customers will benefit from the best of both banks.”



Global Wholesale Banking (GWB) FY’16 revenues grew 6% y-o-y to AED 5.51 billion, driven by strong performance in flow, trade & value-added products. Costs remained tightly controlled across all products, and impairment charges decreased during the period. GWB’s liquidity position remained strong despite challenging economic conditions, benfitting from the Bank’s diversified funding sources.

Global Banking (GB) FY’16 revenues improved 3% y-o-y driven by strong results across Transaction Banking, Specialised Lending and Debt Origination & Distribution, and reflecting the strategic diversification of the business. Expenses were down 7% y-o-y (vs FY’15) as GB continued to focus on cost optimization. Impairment charges were also down significantly following strong recoveries and write backs. The business continued to focus on its Cash Management proposition driving significantly liquidity improvement.

Global Markets (GM) FY’16 revenues were up 13% y-o-y on strong GM sales and trading revenues. Global Markets Sales delivered strong results and maintained momentum throughout the year as the team focused on providing quality solutions for key clients including financial institutions, non-banking financial institutions and corporates. During the fourth quarter, the business managed to maintain and increase liquidity, by introducing new names to its list of global depositors. During 4Q’16, the product team managed its risk effectively, through the volatile period resulting mainly from the surprise U.S elections results and the Egyptian Pound (EGP) floatation.

Highlights from 4Q’16 include:

  • Won “The Best Foreign Exchange Provider in the UAE” for 2016 awarded by Global Finance
  • Won “Best Cash Management Bank” for 2016 awarded by The Asian Banker
  • Won the Middle East’s “Best Overall Bank for Cash Management” awarded by Global Finance
  • Won 13 awards across both Loan & Debt platforms, including:
    • Best Loan House in the UAE for 2016 awarded by EMEA Finance
    • Best Sukuk house of the year 2015-16 awarded by GIFA


Global Retail and Commercial (GRC) continued its trend of strong growth in revenues, generating 7% y-o-y growth in FY’16, driven mainly by Retail and Islamic product sales. Operating expenses declined 5% y-o-y in FY’16, driven by a disciplined cost management focus across all lines of business. Net profits were down 17% y-o-y in FY’16, driven by higher impairment charges due to challenges in the commercial (SME) and retail segments.

Retail lending in the UAE grew 7% y-o-y in FY’16, faster than the market and in line with strategy. Growth reflected strong sales performance and customer acquisition, particularly in mortgages, which grew 34% y-o-y in 2016. Other significant contributors to growth during the year were Bancassurance and investment revenues (up 24% y-o-y) and card-related revenues (up 13% y-o-y).

FY’16 Commercial lending in the UAE decreased 8% y-o-y in line with tighter risk appetite, while deposits increased 6% y-o-y. FY’16 revenues were flat compared to FY’15, while overall FX income was up 9% y-o-y.

FY’16 Islamic Banking lending grew 11% y-o-y as revenues grew 27% versus FY‘15.

Highlights from 4Q’16 include:

  • Enhanced digital platforms including online and mobile banking experienced higher registrations and significant increase in usage and transactions
  • NBAD was the Presenting Partner of SME Beyond Borders & Stars of Business Awards – UAE held in October 2016 in Dubai
  • NBAD SME Academy conducted the workshops ‘VAT, the Commercial Companies Law and Your Business’ in Dubai and Abu Dhabi, delivered by two world-class training entities (Dentons and Deloitte), and attended by over 270 SME executives across Abu Dhabi & Dubai


Global Wealth FY’16 revenues were AED 918 million, down 9% y-o-y and net profits were AED 434 million, down by 17% y-o-y. Overall business results were impacted by challenging market conditions and FX depreciation, while the Securities and Asset Management businesses were also impacted by local trading volumes and market volatility impacted in 2016. However, there was underlying growth in the Global Private Banking business which remained focused on its strategy to be the best private bank for the Arab world and continues to build momentum with strong client acquisition and successful diversification of its client base.

Highlights from 4Q’16 include:

  • NBAD MENA Dividend Leader and NBAD MENA Bond Fund continue to be the largest mutual funds in our tracked peer groups
  • NBAD Securities achieved 8.2% of market share for 2016
  • UAE Private Bank, Global Asset Management & NBAD Securities businesses continue winning key industry awards

Net interest income (including income from Islamic financing) (NII) was AED 1.830 billion in 4Q’16, up 1% q-o-q, but down 1% y-o-y. In both periods, movement in interest expense drove the change in NII.

Net fees and commissions (F&C) for the quarter were AED 588 million, up 35% sequentially and 9% y-o-y. Both q-o-q and y-o-y increases were primarily driven by higher fees earned on lending and sales of insurance products.

FX and investment income was AED 283 million in 4Q’16, down 35% sequentially, but up 69% y-o-y, reflecting the volatile market conditions that have prevailed through the year. Revenue from FX and investments grew 20% y-o-y for the full year.

Other operating income was AED 14 million in 4Q’16, while the decrease in FY’16 to AED 36 million from AED 71 million in FY’15 was due primarily to one-time gains recorded in 2Q’15.


Net impairment charges in 4Q’16 of AED 311 million, were up 8% q-o-q, but down 29% y-o-y. The Bank’s impairments are reflective of the ongoing challenging operating environment, particularly in the retail and commercial segments. Results are in line with guidance and continue to reflect NBAD’s prudent provisioning approach.

Cost of risk (CoR) (annualised) of 57bps for FY’16 has been relatively stable through the year and largely in line with guidance. This is higher than 46bps recorded in FY’15 as the Bank manages through a more challenging credit environment. CoR was 59bps in 4Q’16; slightly higher than 55bps in 3Q’16 and mainly due to a lower denominator effect as loans declined in 4Q’16. Collective provisions continue to be maintained above the Central Bank of UAE’s minimum requirement of 1.5%.

Non-performing loans, net of interest in suspense, declined by AED 181 million to AED 5.592 billion in 4Q’16 as the Bank continued to focus on resolution of its problem loans as well as recoveries. NPL ratio at the end of FY’16 was 2.70% of the gross loan book.

Total provisions were AED 6.409 billion and represented 115% of non-performing loans.


  • Assets were AED 421 billion at the end of FY’16, up 1% sequentially and 3% y-o-y.
  • Net Loans and advances were AED 201 billion, down 2% sequentially and 3% y-o-y. The increase in lending to wholesale and retail clients was offset by the Bank’s move away from FI Trade (financial institutions) and towards higher yielding loans and other assets as part of its ongoing balance sheet optimisation.
  • Customer accounts and other deposits were AED 253 billion, up 4% sequentially and 8% y-o-y primarily due to an increase in government deposits in 4Q’16. CASA was up 2% sequentially and 6% y-o-y to AED 75 billion, representing 30% of total customer accounts and deposits.
  • Equity, consisting of shareholders’ funds of AED 39.8 billion and perpetual Tier-I capital notes of AED 6.75 billion, was up 3% q-o-q and 8% y-o-y, reflecting the earnings growth in 2016.
  • Basel-II ratios, in accordance with UAE Central Bank’s framework, improved further and remain well above the minimum 12% and 8% (Tier-I), with a capital adequacy ratio of 18.1% and a Tier-I ratio of 16.9% as of 31 December 2016.
  • Liquidity & Funding: The Bank’s liquidity position and Loans-to-Deposits ratio (79%) remain strong. The Bank is continuing its focus on diversification and extending the liability profile, and executed selective private debt transactions throughout 2016, including a successful debut 30 year Formosa bond of USD 696 million (USD bond listed in Taiwan). Due to continual demand, NBAD followed up this transaction in January 2017 with an additional 30 year transaction of USD 885 million. Both these issuances are a testament to NBAD’s prominent position and innovative approach amongst MENA issuers to raise funding from new investors in new geographies. Additionally, NBAD executed a USD 2 billion Syndicated Loan in December 2016, which again was very successful and drew strong interest of around USD 3 billion from leading financial institutions around the world.


The Board of Directors has recommended a cash dividend of 45% (45 fils per share) to shareholders for the financial year ended 31 December 2016. The dividends proposal is subject to approval by the shareholders at the Annual General Meeting. 


Following the Bank’s announcement of plans to merge with FGB last quarter, all 3 major rating agencies – Moody’s, S&P and Fitch Ratings – affirmed NBAD’s current ratings.

The Bank’s long term ratings continue to be amongst the strongest combined ratings of any global financial institution, and NBAD is ranked among the World’s 50 Safest Banks in addition to being ranked as the Safest Bank in Emerging Markets by Global Finance.

Abhijit Choudhury
Acting Group Chief Executive


FGB - NBAD merger update
First Gulf Bank PJSC (FGB) and National Bank of Abu Dhabi PJSC (NBAD) continued to pave the way towards a successful merger during the final quarter of 2016, passing a series of significant milestones ahead of merger completion at the end of the first quarter of 2017.

Led by the Integration Steering Committee (ISC) and Integration Management Office (IMO), integration planning remains on schedule and the organisational structure is being further defined.

On 7 December 2016, shareholders in FGB and NBAD approved the merger of the two banks at separate quorate general assembly meetings held in Abu Dhabi. The approval of at least 75 percent by value of the shares represented at each meeting was required to proceed with the merger. During the meetings, FGB and NBAD shareholders also ratified the combined bank’s Board of Directors, once the merger becomes effective.

Following approval from each bank’s shareholders to proceed with the creation of the UAE’s largest bank, a 30-day creditor objection period was triggered by FGB and NBAD on 12 December 2016, concluding on 11 January 2017.

While the transaction has received regulatory consent from the Central Bank of the UAE, further approvals from international regulators and the Emirates Securities & Commodities Authority (SCA) are required before the banks are legally combined into a single entity.

Upon the effective date of the merger, assets and liabilities of FGB will be automatically vested in NBAD in consideration for the issue of shares in the new NBAD entity to existing FGB shareholders. In addition, all FGB shares will be de-listed from the Abu Dhabi Securities Exchange.

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About NBAD
NBAD has one of the largest networks in the UAE, with 103 branches and cash offices and 525 ATMs across the country. NBAD’s growing international presence consists of 44 branches and offices in 16 countries stretching across five continents from the Far East to the Americas, giving it the largest global network among all UAE banks.

Since 2009, NBAD has been ranked consecutively as one of the World’s 50 Safest Banks by the prestigious Global Finance magazine, which also named NBAD the Safest Bank in the Emerging Markets and the Middle East.

NBAD is rated senior long term/short term AA-/A-1+ by Standard & Poor's (S&P), Aa3/P1 by Moody’s, AA-/F1+ by Fitch, A+ by Rating and Investment Information Inc (R&I) Japan, and AAA by RAM (Malaysia), giving it one of the strongest combined rating of any Global financial institution.

A comprehensive financial institution, NBAD offers a range of banking services including retail, investment and Islamic banking. NBAD grows strategically toward its vision to be recognised as the World’s Best Arab Bank.

For further information, please contact
Michael Miller
Head – Investor, Media & Public Relations

The information contained herein has been prepared by National Bank of Abu Dhabi P.J.S.C (“NBAD”). In addition to published financial information, NBAD also relies on information obtained from sources believed to be reliable but does not guarantee its accuracy or completeness. This document has been prepared for information purposes only and is not and does not form part of any offer for sale or solicitation of any offer to subscribe for or purchase or sell any securities nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. This document is not intended to be relied upon as advice to investors or potential investors, who should consider seeking independent professional advice depending on their specific investment objectives, financial situation or particular needs. Some of the information in this document may contain projections or other forward-looking statements regarding future events or the future financial performance of NBAD. These forward-looking statements include all matters that are not historical facts. The inclusion of such forward-looking information shall not be regarded as a representation by NBAD or any other person that the objectives or plans of NBAD will be achieved. NBAD undertakes no obligation to publicly update or publicly revise any forward-looking statement, whether as a result of new information, future events or otherwise.

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