National Bank of Abu Dhabi -Equity Report -26-07-2012

12-Month Fair Value: AED 9.70
Recommendation: Accumulate – Risk Level: 2
Last Close (23 July 2012): AED 8.25

National Bank of Abu Dhabi (NBAD) reported a net profit of AED 1.05 billion in 2Q2012, up 2% YoY but flat QoQ.

Net interest income came in line with our forecast, increasing 3% YoY and 5% QoQ as the NIM improved slightly compared with 1Q2012.

Overall, we believe this is a good set of results with the exception of the weaker-than-expected loan growth. Total operating income matched our forecast while asset quality and cost efficiency trends were in line with our expectations. We maintain our “Accumulate” recommendation on NBAD, with a fair value per share of AED 9.70, which is 18% above the last closing price.