English Version - National Bank of Abu Dhabi

National Bank of Abu Dhabi (NBAD) continued
to build its businesses steadily for the long
term, despite the difficult global and domestic
operating conditions. NBAD remained focused on its
long term goals to serve its clients; deliver upper quartile
returns for its shareholders; provide exciting, demanding
and rewarding careers for its people, and build a franchise
equal to the growing global importance of the UAE and
Abu Dhabi in particular.
Financial Performance
National Bank of Abu Dhabi reported flat net profits of
AED 3,020 million for the financial year ending 2009
compared with AED 3,019 million in 2008. Diluted
earnings were AED 1.35 per share compared with AED
1.37 per share in 2008. This profit was achieved after
taking substantial collective provisions and despite the
past year’s credit and liquidity challenges.
Net impairment charges for the full year were AED 1,408
million of which collective provisions were AED 756
million, specific provisions and write-off charges were
AED 797 million, mitigated by recoveries of AED 145
million. Although no properties have been revalued from
original cost – and being a 40 year old bank there are
many legacy buildings – we have taken an impairment of
AED 37 million in respect of recently acquired land for
our own use.
Collective provisions of AED 1,604 million represents
1.25% of credit risk weighted assets.
Impaired assets increased by AED 615 million for the full
year totalling AED 1,687 million. The non-performing
loans ratio stood at 1.25%, specific and general provisions
taken together cover 158% of impaired assets.
Risk management strategies are in place to manage risk
and contain losses. Successful measures include the
improvement in collections, while close monitoring
of arrears and customised credit programmes to assist
customers are also proving effective.
The 2009 return on equity was 20%. consistent with
NBAD’s medium term strategic objective to maintain an
average return of 25% over the full economic cycle.
Total assets at the end of 2009 reached AED 197 billion,
19.6% higher than at the end of 2008. Customer deposits
rose from AED 103 billion at the end of 2008 to AED 121
billion at the end of 2009, a growth of 17.1%. Customer
loans grew from AED 112 billion to AED 132 billion for
the same period, a growth of 18.3%.
The Bank›s capital position remains strong. Capital and
reserves, including the convertible subordinated debt,
at the end of 2009 were AED 23.3 billion, 34% up on
the AED 17.4 billion at the end of 2008. Total capital
adequacy ratio on Basel II principles in 2009 rose to
17.4% from 15.4% in 2008 and the Tier I capital was
up from 12.6% to 14.9%. Tier I capital was enhanced
during 2009 by the capital injection of AED 4 billion
capital notes from the Abu Dhabi government in March
2009, to reach AED 20.4 billion at the year end. The
classical total assets to capital resources ratio was
8.5 times at year-end; one of the best ratios amongst
internationally active banks.
Improved margins and good funding cost management
led to a 26.7% improvement in net interest income of
AED 4,571 million for the 2009 financial year compared
with AED 3,608 million for 2008.
Operating profits, before provisions and taxes, increased
18.2% for the year to AED 4,501 million. Operating
income increased 20.7%, to AED 6,399 million, and
costs grew 27.1% to AED 1,898 million. The growth
in costs is in line with the 2009 budget as NBAD
continued to invest in its people, network, IT, products
and brand. The cost to income ratio rose to 29.7% at the
end of 2009 in line with NBAD’s objective to remain
within 35% over the medium-term. The ratio compares
favourably with international banks. The provision for
taxes on overseas earnings rose by AED 1 million to
AED 73 million in 2009.
Domestic Banking Division
Domestic Banking Division’s (DBD) businesses
comprising Consumer Banking Group, Elite Banking
and Commercial Banking performed well. The division
reported earnings of AED 912 million and contributed
20.3% of the Group’s top-line operating profits.
Consumer Banking
Consumer Banking Group significantly grew its loans
and deposits. It also increased its customer base on
the back of the bank’s strong franchise, extensive
distribution channels and the concerted efforts of the
branches and sales staff.
NBAD passed a significant milestone with the opening
of its 100th branch, making its branch network one of
the largest in the UAE. We expanded our ATM network
to 336 by year-end and in support of our integrated
channel strategy, we opened a 120-seat state-of-the-art
call centre.
Consumer Banking operates a mobile banking service
with a sales force of more than 150 people who “bring
the bank to the customer”.
NBAD Online Banking increased its active users by
40% to almost 90 000 in 2009 and was the first online
bank in the UAE to achieve ISO certification.
An increased focus on electronic banking services led
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