The Daily Dividend: Bank Dividends, the Abu Dhabi Way

We have recently featured a whole slew of high-yield dividends in the banking sector ahead of the upcoming review that will determine which of the TARP recipient banks will get to begin raising their dividends back to normalized levels.  In our list, we  showed you which US banks still have a dividend above 3% and which held their dividends mostly steady during the recession.  Our quest for finding dividends brings up an almost entirely unknown situation for most US investors today.  But talk about a dividend…

National Bank of Abu Dhabi is one of the larger full-service banks operating in the United Arab Emirates.  The UAE has not had the same uprisings as elsewhere in North Africa and the Middle East, but is in a volatile region.  The bank had many of the same issues of non-performing assets as its US counterparts in the recession, but its profits rose 22% to about $1 billion in 2010.  Its equity is 70.48% held by the government through Abu Dhabi Investment Council and the rest is publicly held, with foreign ownership limited to 25% of the total shares shareholding.

The dividend is our focus.  National Bank of Abu Dhabi approved the distribution of a 30% cash dividend and 20% bonus shares to shareholders listed in the share register held with Abu Dhabi Securities Exchange as of March 21. NBAD’s long-term ratings are as follows: Moody’s Aa3, Standard & Poor’s A+ and Fitch AA-.

This is the sort of dividend that you used to see in the late-1990s from small community banks in the U.S.  Due to turmoil in the markets today, we are looking at more and more isolated or general events rather than routine dividend news for our Daily Dividend at 11:00 AM EST each day.

JON C. OGG