National Bank of Abu Dhabi , the largest lender by assets in the United Arab Emirates, reported a 1 percent rise in second-quarter net profit on Wednesday, in line with analysts' estimates, as rising expenses offset higher revenue. NBAD, almost 70 percent owned by Abu Dhabi's government, made a net profit of 1.45 billion dirhams ($395 million) in the three months to June 30, up from 1.43 billion dirhams in the corresponding period of 2014, it said in a statement.
Analysts polled by Reuters had forecast an average net profit of 1.47 billion dirhams. Revenues totalled 2.72 billion dirhams for the quarter, up 5 percent year-on-year. However, operating expenses jumped to 1.01 billion dirhams, a rise of 17 percent over a year earlier.
The primary contributor to growth in expenses was NBAD's investment in hiring talent, expanding client service capabilities and enhancing IT infrastructure, the statement said. "We delivered this growth despite economic and market headwinds, including lower oil prices, margin compression and lower non-customer income in our global markets business," Alex Thursby, group CEO, said in the statement.
The lender booked 166 million dirhams as impairments in the second quarter, down 22.6 percent from a year ago. Loans grew 20 percent on the year to 217.9 billion dirhams by the end of June, while deposits fell to 230.1 billion dirhams versus 237.4 billion dirhams a year earlier.
In June, the bank launched its inaugural $750 million Additional Tier 1 Perpetual Bond, strengthening its capital position. NBAD is expanding in Egypt to add export financing to its wholesale operations and introduce wealth management services for affluent Egyptians, its CEO told Reuters in March.
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