Credit Crunch Drives NBF Net Profit Down
DUBAI - The National Bank of Fujairah, or NBF, has announced a net profit of Dh30.3 million for the three-month period ended on March 31, 2009.
The bank earned Dh55.4 million in the corresponding period in 2008. This 45 per cent decline in profit reflects deteriorated credit and liquidity conditions and the general economic slowdown,
“This is a solid set of results in one of the most challenging economic environments we have ever seen,” Sir Easa Saleh Al Gurg, deputy chairman of the bank, said in a statement.
“Following the full-year loss in 2008, these results mark a welcome return to profitable operations. The bank will continue its prudent approach in the current market conditions and will pursue selective opportunities for achieving steady growth.”
The loan loss charge for the first quarter is Dh24.2 million compared to a net recovery of Dh0.6 million in the same period of 2008.
Operating income reduced marginally to Dh114.1 million compared to Dh122.3 million in 2008 first-quarter, reflecting the general slowdown in economic activity and higher cost of funds due to tight market conditions.
The liquidity cost in the market has been unprecedently higher and has impacted net interest income and profit, despite the bank’s prudent liquidity management, the statement said. Net interest income and foreign exchange income rose by 2.2 per cent and 1.5 per cent respectively compared to the corresponding period of 2008. Total assets stood at Dh11.9 billion, down from Dh12.8 billion at the year-end.
The reduction in the balance sheet reflects the bank’s risk appetite and efficient liquidity and capital management. Advances to deposits ratio was also prudently managed at 84.6 per cent.