NBAD eyes 20pc profit growth in 2010
Abu Dhabi, February 2, 2010
National Bank of Abu Dhabi (NBAD) aims to boost full-year profit by up to 20 per cent in 2010, as the lender continues to expand locally by opening new branches, its chief executive said.
'Our target level is a 25 per cent return on equity over the economic cycle in a not so good year that is 20 per cent, that's what we got in 2009, that's what we expect in 2010,' Michael Tomalin told Reuters in a phone interview.
'If you assume it (the bank's equity) will go up by 10, 15 or even 20 percent, you can add up 20 or 15 percent to the (profit) number we declared this year,' Tomalin said.
Return on equity is a measure of how much profit a company earns as a percentage of shareholders' equity.
Abu Dhabi's largest bank by market value earlier on Monday reported a 13 percent drop in fourth-quarter net profit due to higher-than-expected provisions for bad loans.
'Basically we have lent to our friends, we haven't lent to people we don't really know very well, some of our friends got into difficulties here and there and as a result we had to make some specific provisions,' Tomalin said.
Its full-year net profit came in flat at Dh3.02 billion.
The bank also reduced its exposure to Dubai World, the debt-ridden state conglomerate, to $239 million from $345 million, which the bank reported at the end of November.
The reduction is a result of the payment of a bond issued by Nakheel, a unit of Dubai World, in which NBAD had invested $114 million.
The bank was one of two Abu Dhabi lenders to subscribe to a $5 billion bond issue in November raised as part of Dubai's $20 billion bond programme to support state-linked entities.
NBAD also plans to open 10 additional branches in the United Arab Emirates, bringing its total to 110 in the country, as well as planning expansion in Asia.-Reuters