National Bank of Abu Dhabi (NBAD), the largest lender by market value in the UAE, reported a two per cent rise in quarterly profit yesterday due to higher net interest income, meeting forecasts.

It had second-quarter net profit of 1.05 billion dirhams ($ 284.8 million), up from 1.03bn dirhams in the same period a year earlier, the bank said. Analysts forecast an average profit of 1.031bn dirhams in a Reuters poll.

Net profit for the first half of the year rose 6.9pc to 2.08bn dirhams compared to 1.95bn dirhams in the opening six months of 2011. The improvement in top-line revenue was due to higher net interest income and net income from Islamic financing contracts, which grew 4.6pc in the first half of 2012 compared to the same period last year. "The group has not changed its forecasts for 2012," said chief executive Michael Tomalin. "Assuming continuing current market conditions, we expect mid to high single-digit growth in earnings for the year with non-performing loans peaking round 3.75pc of performing loans by year end or early 2013." The bank booked net impairment charges of 292m dirhams in the three months to June 30, a drop of 12pc on the same period last year. Provisions for the first six months of 2012 were down 13.2pc due to lower collective provisions and strong recoveries. Non-performing loans increased to 5.34bn dirhams, accounting for 3.18pc of the loan book.