NBF Makes a Smart Turnaround in 2009

ABU DHABI - National Bank of Fujairah or NBF has posted a net profit of Dh 104.3 million in 2009 as against loss of Dh 50.3 million in 2008.



By T. Ramavarman

Published: Fri 29 Jan 2010, 11:35 PM

Last updated: Mon 6 Apr 2015, 10:29 AM

The bank could achieve these impressive results despite ‘difficult credit condition during 2009’ and the provisioning that the bank had to make for the exposure to the troubled Al Gosaibi and Saad Groups of Saudi Arabia.

“The loan impairment charge is Dh 214.3 million for 2009 compared to Dh 179.7 million in 2008. The charge includes an amount of Dh 73 millio Dh 92 million to the Al Gosaibi and Saad Groups.

The bank continues to be prudent and proactive in providing for potential losses in view of the uncertain conditions,’’ the NBF said in a statement issued here on Thursday after the Director Board meeting.

“This is a solid set of results in one of the most challenging economic environments we have ever seen. Following the full year loss in 2008, these results mark a welcome return to profitable operations. The Bank will continue its prudent approach in these unprecedented market conditions and will pursue selective opportunities for achieving steady growth and adding value for its shareholders,” the statement said quoting Shaikh Saleh bin Mohammed Al Sharqi, Chairman of NBF

“The Bank’s progress amidst the global financial crisis is a testament to its prudent & balanced approach to these challenging times . The Bank has grown its core earnings which, coupled with the recovery of the investment portfolio, helped in absorbing credit losses and maintaining profitable operations.

The Bank’s liquidity and capital adequacy ratios are strong and the build-up in provisioning levels has enabled the bank to face uncertain credit conditions in the Gulf with confidence,” said Sir Easa Saleh Al Gurg, Deputy Chairman of NBF.

Operating income reduced to Dh 506.5 million in comparison to the corresponding period in 2008 of Dh 537.9 million reflecting the general slowdown in economic activity and higher cost of funds due to market conditions. The liquidity cost in the market continues to be at unprecedented levels and has had a negative impact on net interest income and profit, the statement said.

In line with the Bank’s strategy, investment in funds was reduced to Dh 56.6 million from Dh 227.4 million as at the year end.

The Portfolio saw some recovery and as a result, a gain on investment of Dh 37.6 million was recognized through the statement of income, compared to a loss of Dh 227.0 million for the corresponding period of 2008.

According to analysts the investment income has made significant contribution in enabling the bank to achieve a turnaround in its financial performance in 2009.

ramavarman@khaleejtimes.com


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