FAB posts 11% jump in H1 profit to Dh5.4b

Dubai - FAB’s annualised earnings per share (EPS) was at 96 fils, up 14 per cent compared to the first half of 2020.

First Abu Dhabi Bank (FAB), the UAE’s largest lender, reported on Wednesday a 19 per cent rise in quarterly net profit, driven by a double-digit growth in non-interest income.

In the first half of 2021, the bank recorded an 11 per cent rise in net profit to Dh5.4 billion year-on-year. The rise was “driven by revenue growth from a solid performance across core businesses despite headwinds from rate cuts, increased contribution from international operations following the recent acquisition in Egypt, and lower impairment charges,” the bank said in a statement.

FAB’s total assets rose 3.0 per cent y-o-y to Dh944 billion while customer deposits grew 6.0 per cent to Dh575 billion. Loans and advances increased by 3.0 per cent to Dh399 billion. The bank maintained a strong liquidity position with Liquidity Coverage Ratio (LCR) at 119 per cent. NPL ratio was at 3.9 per cent, with provision coverage at 97 per cent. Common Equity Tier 1 at 13 per cent is comfortably above regulatory requirements, the statement said.

FAB’s annualised earnings per share (EPS) was at 96 fils, up 14 per cent compared to the first half of 2020. First half operating income rose 2.0 per cent to Dh 9.6 billion while impairment charges declined 36 per cent to Dh 1.1 billion, reflecting improving economic conditions, and adequate provision buffers.

Operating costs jumped 7.0 per cent to Dh 2.8 billion year-on-year reflecting ongoing investments in strategic and digital initiatives, the bank said.

“Cost discipline was maintained amid ongoing investments in strategic and digital initiatives with cost-to-income ratio (ex-integration costs) at an industry-leading level of 28.3 per cent. Growth in lending and investments during the period demonstrate effective balance sheet deployment to enhance returns, while the Group’s foundation remains robust across liquidity, capital and asset quality,” said the statement.

Hana Al Rostamani, group chief executive officer of FAB, said the solid results in the first are a testament to the successful execution of the bank’s strategic priorities, and its tenacious ability to drive its competitive position while capitalising on the opportunities presented by an improved backdrop.

“Demonstrating the unique strength of our diversified franchise, we have achieved solid growth across our core businesses. In Corporate & Investment Banking (CIB), we continued to support and partner with our clients in navigating the gradual economic recovery and focused on driving specialisation in key areas, particularly investment banking, leading to a double-digit growth in revenue,” said Al Rostamani.

“Looking ahead and while uncertainties remain, we are confident that our distinct competitive strengths, proven agility, and innovative spirit, position us well to unlock opportunities for our clients, people, communities and all our stakeholders across the global markets we operate in,” Al Rostamani said.

James Burdett, group chief financial officer, said the strong result was driven by 18 per cent revenue growth sequentially, “led by a very strong performance in CIB from our investment banking businesses, sustained results in personal banking, and higher contribution from our international operations following Bank Audi Egypt acquisition.”

“Impairment charges were lower year-on-year on the back of a significantly improved backdrop compared to the economic conditions at the height of the pandemic during the first half of 2020, founded on a high quality asset portfolio underpinned by prudent risk management. We continue to invest in products, people and technology, which are key enablers to support our future performance while maintaining cost discipline and industry-leading operating efficiency,” said Burdett. — issacjohn@khaleejtimes.com