The global uncertainty continued during 2012 due to the ongoing debt crisis of the Eurozone , US debt ceiling crises and downgrading of several Eurozone sovereign credit ratings. The UAE economy, however, showed considerable resilience with an estimated growth of 4% as per IMF estimates for the year 2012. Growth has been witnessed in some sectors like energy, trade, logistics, tourism and retail. The annual inflation in the UAE has slowed to 0.7% in 2012 as per the IMF estimates. As a result of the low global interest rates and subdued inflation in the domestic market, UAE’s monetary policy remained relatively accommodative under the fixed $/AED exchange rate. The UAE equity markets benefited from the improved investor sentiments during 2012 with both ADX and DFM registering double digit growth compared to 2011. Overall, the banking sector in the UAE has seen a satisfactory growth in 2012 amidst positive macroeconomic performances.
National Bank of Umm Al-Qaiwain ( NBQ) adopted a cautious approach towards credit expansion and concentrated its efforts on close monitoring of the existing credit portfolio of accounts to arrest any quality deterioration. The Bank has a clear strategy in place to further enhance shareholder returns and take advantage of the selected growth opportunities.
Following a policy of balancing prudence with profitability, NBQ has delivered a robust performance during 2012 with a net profit of AED 328.5 million. As at end of 2012, total assets amounted to AED 12.239 billion with Loans portfolio of AED 6.748 billion and Customer deposits of AED 7.279 billion.
Shareholders’ funds increased to AED 3.419 billion as 31/12/2012 as against AED 3.318 billion as at 31/12/2011. Earnings per share were 21 fils for the year ending 31/12/2012.
The conservative policy of maintaining high liquidity ratios adopted by NBQ over past several years has once again underlined its importance following the global financial crises and its after effects on the UAE economy. A high Capital Adequacy ratio of 31.8 % as at end of 2012 is well over the minimum 12% stipulated by the UAE Central Bank, highlighting the Bank’s financial strength. Likewise the Tier 1 ratio of 30.9 % is well in excess of the minimum 7% stipulated by the UAE Central Bank.
In order to strengthen the shareholders funds further by retaining a portion of the profit earned, the Board has recommended 16% cash dividend for 2012.
For the year 2013, the UAE government plans spending increases on the back of continuing strong oil prices. Federal budgets and individual Emirates have planned substantial budget spending. Accordingly, the Bank is confident of building on its strong balance sheet with a balanced growth of its assets and liabilities on the back of targeted Govt budget spending.
The strategic development plans launched under the initiatives of His Highness Sh.Khalifa Bin Zayed Al Nahyan, President of the UAE, in all the emirates, based on the needs and aspirations of the UAE nationals, is certain to improve the quality of life of all the communities in the UAE.
On behalf of the Board of Directors, I would like to express my gratitude to His Highness Sheikh Saud Bin Rashid Al Mualla – Ruler of Umm Al-Qaiwain and Member of the Supreme Council of the United Arab Emirates – for his continued support for the development of NBQ.
I would also like to state my appreciation for the ongoing initiatives and support of the UAE Central Bank to regulate the country’s financial sector and for their helpful guidance to NBQ during this year. Equally important has been the steadfast confidence of our shareholders, the loyalty of our customers and business partners and the dedicated efforts of our management and staff. Together they have contributed to the success of NBQ and continue to provide us with the strength and determination to face all future challenges.
Rashid Bin Saud Al Mualla