NBF's H1 profit plunges 82% to Dh65 million
The bank's non-performing loan ratio stood at 7.5 per cent compared to 6.7 per cent as at March 31, 2020.
National Bank of Fujairah (NBF) on Tuesday announced that its net profit slumped 82 per cent to Dh65.1 million in first-half of 2020 as compared to Dh357.1 million in the corresponding period last year, impacted by higher provisions.
NBF reported net impairment provisions of Dh456.3 million for the six-month period compared to Dh209.9 million in 2019. While its impairment reserve fell by Dh66.5 million to Dh296.6 million following the resolution of a number of difficult cases. Total provision coverage ratio, including impairment reserves, stood at 79.6 per cent compared to 107.3 per cent as at December 31, 2019.
Dr Raja Al Gurg, deputy chairman of NBF, said the UAE banking industry continues to face pronounced risks, including asset quality concerns, rising cost of risk, slowdown in economic activity and margin pressures.
"Our balance sheet remains solid with strong liquidity and capital ratios, and we are confident that our prudent business model and governance standards will continue to steer the Group through the careful management of the opportunities and challenges that will present themselves in the rest of the year," said Al Gurg.
The non-performing loan ratio stood at 7.5 per cent compared to 6.7 per cent as at March 31, 2020, and 5.4 per cent as at December 31, 2019.
Operating income fell 10.2 per cent to Dh755.6 million from Dh841.5 million in the corresponding period of 2019. Net interest income and net income from Islamic financing and investment activities and net fees, commission and other income stood at Dh511.9 million and Dh156.7 million, respectively, compared to Dh563.3 million and Dh198.4 million in the corresponding period of 2019.
NBF's operating profit dropped to Dh521.4 million from Dh567 and its operating expenses were reduced by 14.7 per cent to Dh234.2 million.
Loans and advances and Islamic financing receivables stood at Dh26.4 billion compared to Dh27.1 billion at 2019 year-end and Dh27.9 billion as at 30 June 2019.
Customer deposits and Islamic customer deposits increased by 3.1 per cent to Dh32.9 billion compared to Dh31.9 billion at 2019 year-end. Total assets rose by 3.9 per cent to reach Dh44.5 billion from Dh42.8 billion at 2019 year-end. Shareholders' equity stood at Dh6.2 billion compared to Dh6.4 billion at the end of 2019.
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