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Euromoney, December 2015

The tightening liquidity squeeze in the Gulf has triggered questions about the ambitious international expansion plans of National Bank of Abu Dhabi. Does its major shareholder, the Abu Dhabi state, still have the stomach for such boldness as the UAE reels from the financial impact of oil at $50 a barrel? Will CEO Alex Thursby even be allowed to see it through?

Thursby has always brought a certain energetic gumption to his jobs and is no less enthusiastic than usual when Euromoney calls. Insisting he will be around to see through the bank’s expansion “unless I get knocked over by a bus”, he suggests that the international growth so far has already proven itself as a useful antidote to the liquidity problems in the Gulf.

“It’s been absolutely outstanding for us,” he says. How so? Well, the third quarter results, accurate to September 30, show that in the first nine months of 2015 the bank’s international network, which accounts for about 20% of revenues, provided greater growth than the UAE did. Revenue grew 13% year on year in international businesses, deposits grew from AED63 billion to 78 billion and now represent 33% of the group total, and NPLs in international businesses have halved to just 0.5%, compared to a group figure of 2.6%.

“This is the whole reason we decided we had to create a viable strategy for the West-East corridor, and for those entities outside who trade with that corridor,” he says, referring to NBAD’s key area of ambition from Africa through the Middle East into Asia.

“With the liquidity squeeze that’s happened here, we and the system have lost a lot of government deposits.” NBAD had Dh37 billion of outflows of government deposits in the first half of the year alone. “But we have been able to fill that almost dollar for dollar from the international business. In fact, if anything, our international business is throwing off more liquidity than our loan assets.

“So it’s been amazing, to be perfectly frank.”

Chris Wright
Chris Wright
Chris is a journalist specialising in business and financial journalism across Asia, Australia and the Middle East. He is Asia editor for Euromoney magazine and has written for publications including the Financial Times, Institutional Investor, Forbes, Asiamoney, the Australian Financial Review, Discovery Channel Magazine, Qantas: The Australian Way and BRW. He is the author of No More Worlds to Conquer, published by HarperCollins.

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