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Outlook Positive for Next 2-3 Years: NBAD Chief

Michael Tomalin, chief executive of NBAD, said that the bank is particularly financing development activities and projects that make sense.

“We never stopped lending. We are lending to all sectors of the economy including SMEs, development projects, corporate sector, and to clients with good projects,” he told reporters on the sidelines of a ceremony held to launch the ‘G2 e-dirham’ service for paying fees of the Ministry of Finance using the bank’s platform, in the capital on Monday night.

He said that with the injection of funds by the Central Bank of the UAE and the Ministry of Finance, the liquidity position has reached a comfortable level compared with the beginning of the year.

However, he said that a lot of money that left the banking sector soon after the financial crisis has not been replaced. “So arguably we need more money... at the same time central bank wants to make sure that the increase in monetary growth is consistent with its plans of ten per cent expansion in the banks’ balance sheets in 2009,” 
he said.

The NBAD chief executive said that the bank’s outlook is very positive for the next 2-3 years, which also reflects from the fact that at a time when other banks are retreating and laying off staff, NBAD is investing into its operations, products, brands and the network.

He said that recently the bank organised a meeting of its top 120-executives from the UAE and 10 countries where it has operationsincluding the US, the UK, France and Switzerland, and Egypt and other countries to refresh and renew its strategy for 
the future.

“We are not talking of cost cuttings, but growing our business, since our return on equity is strong, and our operating profits grew 45 per cent in 2008,” 
he added.

Tomlin said that the bank was hiring professionals for its expansion drive in all the segments including the Islamic and private banking and trade finance.

The nation-wide branch network is being expanded from the current 87 to 100 by the year end, he said.

The bank, which has assets of Dh165 billion, said that it has taken total provisions of Dh1.18 billion to meet any future bad loans.

On May 7, Credit Suisse in a research note estimated that the provisions for doubtful debts increased by 70 per cent to Dh1.2 billion in 2009, which is likely to result in a net income decline of 8.7 per cent. However, this fall would still be lower than the sector average of 
17.5 per cent.

NBAD made 12 per cent loss in the first quarter of the year compared with the same period last year. 


haseebhaider@khaleejtimes.com