The FGB board recommended a 20 per cent cash dividend and 10 per cent bonus shares.
Total operating income increased by 37 per cent to Dh2.8 billion with net interest income of Dh1.3 billion representing an increase of 10 per cent or a 37 per cent increase if excluding the extra interest generated during the IPO cycles of 2006-2007. Other operating income totalled Dh1.5 billion, reflecting an increase of 74 per cent.
Earning per share increased by 31 per cent from Dh1.23 to Dh1.61.
The net profit of Dh621 million for the fourth quarter of 2007 was 23 per cent higher than the third quarter of 2007 and 57 per cent higher than the same quarter of 2006.
FGB's consistent growth is coupled with healthy profitability, efficiency, liquidity and capital adequacy ratios with return on average equity at 21 per cent, return on average assets at 3.3 per cent, cost to income ratio at 21.6 per cent. Other ratio such as loan to deposits was seen at 85 per cent and a capital adequacy ratio at 15 per cent, demonstrating ongoing strong financial performance.
With assets in excess of Dh73 billion, FGB ranks among the UAE's largest financial institutions. During 2007, FGB grew its assets by 53 per cent, customers' deposits by 52 per cent, and its loan book by 77 per cent. The non-performing loans to gross loans ratio was at only 1.0 per cent, which is comparable to the best performing, highly rated international banks.
In line with FGB strategy to become a full-fledged diversified financial group, 70 per cent of the net profit was generated from its major businesses: retail, corporate banking and treasury, and investment divisions, while the remaining 30 per cent of the record profit was generated mainly by fully-owned subsidiaries - 'Mismak' and 'First Merchant International', in real estate and merchant banking activities. This was complemented by three associate companies: First Gulf Financial Services (FGFS) for equity brokerage (45 per cent owned by FGB), Green Emirates Properties for property management and real estate brokerage and Aseel Islamic Finance - both 40 per cent owned by the bank.
The retail business which contributed 26 per cent to the total revenue of the bank saw a series of new product launches in 2007 which helped FGB expand its customer base.
The corporate business after spinning-off a few of its units contributed 24 per cent to the total revenue of the bank in 2007. The bank's strategy of adding new dimensions through structured products and its growing involvement in syndications proved a growth driver for this line of business.
The treasury and investment business contributed 30 per cent to the total revenue through efficient management of the liquidity as well as generating considerable fee and investment income.
"Product and segment expansion will be further enhanced during the coming 12 months as FGB continues with its strategy of evolving into a fully-fledged financial services provider," said André Sayegh, CEO, First Gulf Bank.
Abdulhamid Saeed, managing director, First Gulf Bank, said, "FBG's financial results for 2007 are a reflection of a sound strategy approved by the board of directors and successfully implemented by the bank's management."
He said that with positive economic prospects for the UAE throughout 2008, FGB will play a key role in partnering the expansion which is taking place across a variety of commercial, industrial and economic segments.
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