Abu Dhabi – Mubasher: NBK Capital, the investment arm of the National Bank of Kuwait (NBK), said it has kept its fair value (FV) for the National Bank of Abu Dhabi (NBAD) at AED 11.8 and gave the recommendation “Hold”. The research firm’s FV is 11% higher than the stock’s current price.

NBAD reported a net profit of AED 1.45 billion in the second quarter of 2015, a 2% rise year-on-year due to higher operating income.

“Operating income was up 5% year-on-year and came in inline (-0.4%) with our forecast due to stronger-than-expected fee income,” NBK Capital said in its most recent report on the stock, adding that net interest income grew 5% in Q2-15 and 3% quarter-on-quarter, although margins were broadly stable in Q2-15.

Fee income increased 8% quarter-on-quarter, but was down 6% year-on-year on a higher base, NBAD said its financial statement.

“Loan growth spiked by 8% in Q2-15, significantly higher than our expectation, taking year-to-date growth to 12%,” the research firm noted, adding that the “increase in loans was driven by the banking sector,” which surged 26% quarter-on-quarter, followed by the corporate sector, which added +9% quarter-on-quarter.

Meanwhile, deposits dropped 8% quarter-on-quarter due to a steep decline in time deposits, by around 15% quarter-on-quarter, NBK said, adding that the CASA deposits rose 12% year-on-year, while their contribution increased to 32% in June 2015, against 28% in March 2015.