Abu Dhabi's NBAD Q1 profit falls 10 pct on provisions

Abu Dhabi’s NBAD Q1 profit falls 10 pct on provisions

NBAD cites rise in provisions for Q1 decline; Non-performing loans rose to 3.77 bln dirhams

April 19, 2011 2:49 by Reuters

National Bank of Abu Dhabi, the UAE’s largest lender by market value, on Tuesday reported a 10 percent decline in quarterly profit due to higher provisions, missing forecasts.

NBAD said net profit was 927 million dirhams ($252.4 million) in the first quarter ended March 31, compared to 1.03 billion dirhams in the prior-year period.

Analysts had forecast average profit of 954.20 million dirhams in a Reuters poll.

The bank booked net impairment charges of 365 million dirhams in the first quarter, up 62.2 percent from the same quarter last year.

Non-performing loans increased to 3.77 billion dirhams, representing 2.56 percent of the bank’s loan book.

“Although net profits for the current quarter are below the first quarter of 2010 as a result of higher provisions, top line revenues, operating profits, assets, loans and deposits are all at record levels,” NBAD Chief Executive Michael Tomalin said in a statement.

Operating income for the quarter was 1.88 billion dirhams, up 6.2 percent compared with the same period last year.

Loans and advances grew to 143.2 billion dirhams at the end of the first quarter, up 4.7 percent from the fourth quarter.

In February, Tomalin told Reuters that 2011 would be a tricky year for UAE banks.

(Reporting by Stanley Carvalho, editing by Amran Abocar)