National Bank of Umm Al Quwain (NBQ) yesterday reported Dh320 million net profit for 2011, down 8.7 per cent from Dh350.8 million earned the previous year. The bank suffered a decline in net interest income to Dh511.1 million last year from Dh527 million in 2010. Operating income also fell to Dh390.5 million from Dh438.32 million. In a statement posted on the Abu Dhabi Securities Exchange\'s website the bank said it continues to maintain a prudent provisioning policy both for its retail and corporate portfolios. ‘Proactive measures\' Article continues below \"As a result of various proactive measures initiated by the bank since the onset of the financial crisis, the bank was able to reduce the incidence of provisions on impaired assets net of recoveries to Dh62.11 million in 2011 compared to Dh94.25 million in 2010,\" the bank said. NBQ\'s total assets fell from Dh13.23 billion in 2010 to Dh11.17 billion. The bank attributed the contraction in the book size to a 12.5 per cent decline in the loans and advances portfolio and a 10.4 per cent decline in customer deposits. Liquidity ratios The bank said its focus on balance sheet optimisation has resulted in strong capital adequacy and liq-uidity ratios. As a result of the improved liquidity position, NBQ arranged the repayment of Dh578.4 million tier 2 funds it received from the Ministry of Finance during 2011 and additionally the bank also prepaid Dh110.1 million in syndicated loans. Currently the bank does not have any syndicated loans outstanding and it remains well capitalised with a capital adequacy ratio of 29.3 per cent and a tier 1 ratio of 27.6 per cent as of December 31, 2011.