NBAD Fourth-Quarter Profit Declines 1% as Expenses Rise, Misses Estimates

National Bank of Abu Dhabi PJSC (NBAD) posted a 1 percent decline in fourth-quarter profit, missing analyst estimates, as expenses rose and the lender set aside more money to cover bad loans. It raised dividend payouts.

Net income dropped to 724 million dirhams ($197 million) from 732 million dirhams a year ago, the United Arab Emirates’ second-biggest bank said in an e-mailed statement today. The median estimate of three analysts was for a profit of 897 million dirhams, according to data compiled by Bloomberg.

The bank was hurt “by the Arab Spring, low interest rates and the Euro crisis,” Chief Executive Officer Michael Tomalin said. “Net earnings have remained steady” despite higher provisions for loan losses, he said.

U.A.E. banks are recovering from the global credit crisis, which slowed lending, hurt investment banking and led to rising loan defaults. First Gulf Bank PJSC (FGB), a lender controlled by Abu Dhabi’s ruling family, reported an 18 percent increase in fourth-quarter profit, beating analysts’ estimates.

National Bank of Abu Dhabi’s operating expenses rose 20 percent to 758 million dirhams, it said. Net impairment charges increased 14 percent to 482 million dirhams, taking the proportion of bad loans to gross lending to 2.94 percent from 2.31 percent in 2010.

The shares have fallen 2.3 percent this year compared with a 2.3 percent increase in Abu Dhabi’s ADX Banks Index. (ADBF) The stock was suspended from trading today.

The board proposed a cash dividend of 30 fils a share and 30 free shares for every 100 held. National Bank of Abu Dhabi paid a cash dividend of 25 fils a share and 20 free shares for every 100 held in 2010, according to data compiled by Bloomberg.

To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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