First Abu Dhabi Bank profits dip 3.5% in 'soft market'
Bank realises Dh500 million in cost synergies in first year of operations
First Abu Dhabi Bank (FAB), the UAE's largest bank, on Monday announced that net profit for 2017 dropped 3.5 per cent to Dh10.92 billion as compared to Dh11.32 billion in the previous year.
The group's revenue also declined four per cent year on year to Dh19.53 billion amid softer market conditions and portfolio optimisation. Its earnings per share stood at Dh0.96 compared to Dh1.0 in 2016.
The board of directors recommended a cash dividend of Dh0.70 per share, implying total cash dividends of Dh7.6 billion for 2017, it said in a statement on Monday.
The bank also announced its plan to foray into Saudi Arabia as part of its expansion strategy.
"FAB's 2017 financial results are a clear testament to the sound rationale behind the merger and clearly demonstrate that it was a well-planned and strategic decision, based on forward-looking market perspective and insights. Our merger created the UAE's largest bank, with the aim of actively supporting the UAE's economy through combining the expertise and strengths of both legacy banks," said Sheikh Tahnoon bin Zayed Al Nahyan, chairman of FAB.
"We are confident that we will continue to demonstrate sustained growth and meet our goals," Sheikh Tahnoon said.
FAB - created after the merger of First Gulf Bank and National Bank of Abu Dhabi - realised Dh500 million in cost synergies in the first year of its operations.
The merged bank's loans and advances totalled Dh330.5 billion, an increase of one per cent quarter on quarter and one per cent decline year on year. Customer deposits reached Dh395.8 billion, up four per cent both quarter on quarter and year on year. It saw the loan-to-deposit ratio improving to 83.5 per cent by the end of 2017.
Abdulhamid Saeed, group CEO of FAB, said the bank has moved significantly ahead in its integration journey in a short period of time.
"We have successfully delivered against many of the milestones that were set, ahead of schedule and realised around Dh500 million in cost synergies in our first year alone. We have also finalised our organisational structure and operating model and integrated our policies and risk framework. As part of the overall integration, we are also evaluating our local activities and branch network to enhance efficiency and productivity across the group," Saeed said.
The bank said that one-time integration costs remain under tight control and were up in the last quarter, reflecting accelerated integration momentum.
Listed on the Abu Dhabi Securities Exchange, FAB's shares on Monday closed unchanged at Dh11.15 as the lender announced results after market closure. Its counter saw 1.148 million shares changing hands worth Dh12.8 million in 61 trades.
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