NBAD looks steady despite global fears

National Bank of Abu Dhabi touts its reputation as one of the safest banks in the world for retail customers.The bank's shareholders should feel just as safe.For now, the signs at NBAD are promising.It has been the best performing banking stock in the UAE, up 4 per cent to Dh11.45 since last month.That is hardly a jaw-dropping return, but consider that during the same period, the MSCI World index of global equities has fallen 12.5 per cent to 1,141.91.Emirates NBD, based in Dubai and the UAE's biggest bank by assets, has risen only 0.2 per cent since the start of last month. NBAD does have characteristics of a haven, said Raj Madha, an analyst at Rasmala Investment Bank."It has strong links with the government, both on the deposit and the lending side. It has a top-tier client base, and not an unreasonable level of exposure to the property sector," he said.NBAD's ties to Abu Dhabi are a distinct selling point.Yields on Abu Dhabi bonds have fallen steadily throughout the month as the emirate attracts interest from fixed-income investors, and the capital's biggest bank is also seeing a great deal of interest.However, investors in the bank should be wary if a renewed global slowdown prompts a sharp decrease in the price of oil, which funds much of the UAE Government's expenditure. "We're looking for government spending to be the primary driver of growth acceleration," Mr Madha said. "If we have lower oil prices, we more or less get directly lower government spending." The bank is more conservatively run than some rivalsbut has been on a growth spurt. Loans and advances have risen 11.7 per cent to Dh152.9 billion since the start of the year, leading to a rise in income from fees and commissions.