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First Gulf Bank reports Dh406 million net profit

ABU DHABI — Abu Dhabi-based First Gulf Bank (FGB) has reported record first quarter results with a net profit of Dh406 million ($111 million) for the first three months of this year ending March 31.

The results — an 8 per cent increase on the first three months of 2006 - reflect growth across all the bank's core businesses, including corporate, treasury and investment, retail and ancillary businesses. Total operating income in the first quarter of this year reached Dh564 million ($153 million), exceeding the first three months of 2006 by 9 per cent.

"This is a very encouraging performance when considering that first quarter results for 2006 were aided by revenue from two major IPOs and the absence of similar revenue in the first three months of this year. While the core net profit represented only 35 per cent of total 2006 first quarter net profit, it represented 65 per cent of total net profit for first quarter 2007," explained André Sayegh, FGB's Chief Executive Officer. "We have continued to reap the dividends of our highly focused strategy of income diversification which will further advance by seizing opportunities emerging from the vibrant UAE economy which allows us to grow our loan book and fee income."

"FGB is achieving healthy liquidity, profitability and efficiency ratios with its loans-to-deposit ratio at 80 per cent, return on average assets at 3.3 per cent, return on average equity at 17.3 per cent and cost-to-income ratio at 26 per cent."

The bank also maintained international-standard ratios on non-performing loans and their provision coverage. Its non performing loans to gross loans ratio is 1.3 per cent and provision coverage around 133 per cent.

"FGB's balance sheet also demonstrates consistent growth. After excluding the March 2006 IPO outstandings, total assets rose 55 per cent on the same period last year, advances increased by 45 per cent, deposits by 119 per cent and shareholder equity by 8 per cent," added André Sayegh.

At the end of March this year, FGB's earnings-per-share was Dh0.32 ($0.09) compared to Dh0.30 ($0.08) at the end of March 2006.

"In line with the board's pledge to shareholders at the last annual general meeting, the bank is now working towards achieving an average return on equity in excess of 18 per cent," said André.