|01-30-2015, 12:04 AM||#1|
NBAD posts strong year, sees difficult 2015
The National Bank of Abu Dhabi (NBAD) reported on Wednesday strong fourth-quarter and 2014 profit, but showed worries of a weaker 2015 on lower oil prices and fiercer local competition.
NBAD said net profit for the last three months of 2014 jumped 27.6% from a year earlier to hit AED1.37 billion ($373 million), with earnings boosted by increased transactions income and as other UAE banks, lower impairments.
NBAD’s income from fees and transactions jumped 20.8% in the fourth quarter.
With net interest margins declining and affecting banks’ incomes during a period of low interest rates, NBAD is one of the banks that had increased its focus on fee-paying units and businesses.
While dependent on market conditions, the pressure on NIMs -- the amount made on lending over the cost of initially securing funds -- was set to continue, Thursby said.
But as for 2015, the bank was not so optimistic.
"Growth rates will not be as great," NBAD Chief Executive Alex Thursby said, without being more specific. "Institutions will be chasing a more limited pie. We will have good-to-average growth and competition has not shut up."
Economic growth in the UAE and the region is expected to be hampered by a 60% fall in oil prices over the last seven months.
The International Monetary Fund (IMF) earlier this month slashed 2015 growth forecasts by one percentage point for the UAE.
Credit ratings agency Moody’s said also that economic growth in Abu Dhabi will be weaker if oil prices remain around the levels they are now, but said the government has the capabilities to withstand the turmoil.
"There`s a possibility that liquidity will start disappearing or reducing in the second half, particularly in U.S. dollars," Thursby said, without specifically mentioning U.S. policy, where an interest rate increase is highly expected later this year, which may affect the allocation of some funds in the region.
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