Abu Dhabi-Mubasher: NBK Capital lowered the fair value of National Bank of Abu Dhabi (NBAD) by 19.5% to AED 9.50, changing its recommendation from “Hold” to “Buy”.
NBK Capital’s evaluation was based on the gradual decrease in some pressure points like loan yields, high year-on-year cost growth that were witnessed recently, according to a report released by the investment arm of NBK
The impact of the sector slowdown is likely to be milder on NBAD than on its peers, said NBK Capital, adding that NBAD is better positioned in terms of liquidity and in terms of its corporate-centric balance sheet as total non-personal loans account for 84% of overall loans.
The report expected loan growth to slow to 4% in 2016, compared to 8% in 2015.
NBK Capital expected NBAD’s net profit to decline marginally by 2% in 2016.
NBAD still faces a risk of decreasing public-sector sector deposits, representing 36% of total deposits. The bank witnessed an AED 24 billion decline in public-sector deposits YTD, according to the report.
