National Bank of Abu Dhabi (NBAD) and Abu Dhabi Commercial Bank both saw profits rise by more than 100 per cent and total assets increase by close to 50 per cent. ‘2006 is likely to be a tougher year,’ said NBAD chief executive officer Michael Tomalin. ‘However, the bank is well placed to benefit from the accelerating pace of change and investment in the UAE, Abu Dhabi in particular, and the relative performance of NBAD is likely to remain good.’

Emirates Bank Group also announced a leap in profits, which partly reflected the successful expansion of its Islamic banking activities through Emirates Islamic Bank (see below): balances of sharia-compliant financing and investment products increased to AED 2,441 million ($665.1 million) at the end of 2005 from AED 421 million ($114.7 million) a year earlier, while Islamic deposits rose to AED 3,593 million ($979 million) from AED 1,233 million ($336 million). Among the federation’s smaller institutions, National Bank of Fujairah (NBF) and National Bank of Ras al-Khaimah reported impressive results, both managing to grow profits by about 50 per cent. Commercial Bank of Kuwait on 31 January followed the lead of local rival National Bank of Kuwait by posting a 30.2 per cent rise in net profits – with a more conservative regulatory regime curtailing the ability of the state’s banks to expand as rapidly as elsewhere in the region. On the same day, Bank Muscat announced a 33.1 per cent increase in profits, with the board recommending a 40 per cent cash and a 10 per cent stock dividend. Recovery of non-performing loans increased significantly over the course of the year to RO 15.9 million ($40.8 million) from RO 6.3 million ($16.2 million) in 2004.