National Bank of Abu Dhabi (NBAD) reported net profits of AED 1.320 billion for Q3 2016, flat year-over-year (y-o-y) and down four per cent sequentially. During the period, strong underlying growth trends and solid investment income were offset by a seasonal slowdown and ongoing challenging market conditions.
For the nine month period of 2016, net profits were down five per cent y-o-y due to lower investment gains and higher impairment charges, despite growth in strategic businesses and overall stronger operating profits.
Expenses were down two per cent y-o-y and down one per cent q-o-q in Q3 2016 as the bank continues to tightly control expenses whilst also investing in talent, operations and infrastructure.
Loans were AED 205 billion, up one per cent sequentially and down three per cent y-o-y. Lending growth in Q3 2016 was led by Global Wholesale, while Retail lending grew both q-o-q and y-o-y. CASA improved 4 per cent on a y-o-y basis while the Bank continued to attract more deposits from our international clients.
In 3Q16, the Bank continued to maintain its strong liquidity and robust capital positions, with a Tier-1 ratio of 15.8 per cent and strong credit ratings. Return on Shareholders Funds (RoSF) in Q3 2016 and the nine month period in 2016 was 13.4 per cent as it continues to be impacted by challenging market conditions.
NBAD continues to perform well, with strong underlying growth and disciplined cost management being two highlights this quarter. As we progress towards our merger with FGB, it is vital that we maintain stability of funding and consistent growth of the core business, which I am confident we will achieve. Our merger with FGB is progressing well. A new leadership team has been appointed for the combined bank, and we are beginning to put in place the strategy which will ensure continued growth and enhanced value for all of NBADs stakeholders going forward, said HE Nasser Alsowaidi, Chairman of NBAD.
Abhijit Choudhury Acting Group Chief Executive added, We delivered a solid set of results in the third quarter reflecting continued underlying strength in our core businesses. We achieved this performance during a period of seasonal slowdown and ongoing challenging market conditions, whilst we continued to maintain expense discipline along with strong capital and liquidity positions. In global wholesale banking, we delivered growth across strategic flow businesses as our transformation towards an originate to distribute model continues to take effect. Additionally, our Retail lending business continued to outperform in the domestic market.
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