National Bank of Fujairah Q1 2023 net profit surges 151.8%, reaching Dh152 million

National Bank of Fujairah (NBF) recorded year-on-year growth of 151.8 per cent in its net profit for the first quarter of 2023 to close the three month period at Dh152.0 million compared to Dh60.4 million in the corresponding period of 2022.

Supported by higher net interest income and net income from Islamic financing and investment activities and fee income, NBF posted an operating profit of Dh397.9 million for the three month period, a rise of 35.7 per cent compared to Dh293.2 million in the corresponding period of 2022 and up 30.9 per cent quarter-on-quarter.

Operating income reached Dh554.1 million, up 34.2 per cent compared to Dh412.8 million in the corresponding period of 2022 and up 12.0 per cent compared to Q4 2022 reflecting the robust core business performance, good levels of activity and enhanced asset and liability management in a rising interest rate environment.

Net interest income and net income from Islamic financing and investment activities, rose 69.4 per cent, while net fees, commission and other income increased 6.6 per cent compared to the corresponding period of 2022, reaching Dh404.1 million and Dh112.8 million respectively; and experienced a growth of 10.5 per cent and 24.5 per cent respectively compared to Q4 2022.

Foreign exchange and derivatives income stood at Dh40.1 million compared to Dh47.1 million in the corresponding period of 2022 and up 3.3 per cent compared to Q4 2022.

NBF maintained its policy of prudent and transparent recognition of problem accounts taking into consideration the new credit risk standards being introduced by the Central Bank of the UAE and the risk of global recession. NBF secured net impairment provisions of Dh245.8 million for the three month period ended 31 March 2023 compared to Dh232.9 million in the corresponding period of 2022. During the period, the bank’s impairment reserve reduced by 1.8 per cent to Dh165.1 million compared to Dh168.2 million as at 31 December 2022. Total provision coverage ratio improved to 110.2 per cent compared to 101.5 per cent as at 31 December 2022. The NPL ratio improved to 5.9 per cent compared to 6.9 per cent as at 31 December 2022 as the bank successfully progressed in the resolution of few exceptional exposures.

Operating expenses increased by 30.7 per cent, reflecting NBF’s investments in its businesses, systems, infrastructure and people. “These investments include a set of digital initiatives to further enhance our focus on exceptional customer service through digital adoption and innovation,” the bank said in a statement. Nevertheless, NBF’s cost-to-income ratio improved to 28.2 per cent compared to 29.0 per cent in the corresponding period of 2022.

he capital adequacy ratio (CAR) stood at 18.0 per cent (Tier 1 ratio of 16.8 per cent and CET 1 ratio of 13.2 per cent) compared to 18.6 per cent (Tier 1 ratio of 17.4 per cent and CET 1 ratio of 13.6 per cent) at 2022 year-end and is being maintained at this level to support the bank’s ability to grow and to meet any challenges that may arise from the evolving global economy.

Customer deposits and Islamic customer deposits stood at Dh34.8 billion compared to Dh35.7 billion at 2022 year-end, up by 8.3 per cent from 31 March 2022. Current and Saving Accounts (CASA) deposits stood at 43.2 per cent of total customer deposits softening the impact of increasing rates for fixed term products on deposit costs.

Dr. Raja Easa Al Gurg, Deputy Chairperson said: “We are pleased to see an impressive start to 2023 with a robust set of results for the first quarter supported by the relatively buoyant business environment and the government’s commitment to diversifying the UAE’s economy. Likewise, NBF’s staunch focus on quality growth in supporting our customer’s business across all principal segments, improvement in asset quality and proactive management of investment portfolio enabled it to achieve a strong overall financial performance.”

• Business