FAB reports 10% rise in 2018 profit as costs and impairments drop
The lender also reported a 4 per cent rise in fourth quarter net profit
First Abu Dhabi Bank, the UAE’s largest lender by assets, reported a 10 per cent year-on-year rise in its full-year-2018 net profit, as impairments for bad loans fell and costs declined.
FAB reported group net profit of Dh12 billion in 2018, it said in a statement on Thursday. The lender was formed through the merger of the two biggest lenders in Abu Dhabi - National Bank of Abu Dhabi and First Gulf Bank.
Impairments for bad loans shrunk 28 per cent to Dh1.73bn, while operating expenses fell 9 per cent to Dh5.33bn.
"First Abu Dhabi Bank registered a strong set of financial results in the second year post-merger …. as we continued to cement our leading market position both in corporate and personal banking,” Abdulhamid Saeed, FAB’s group chief executive said.
The bank, which in 2018 became the largest UAE company by market capitalisation, realised “significant operating efficiencies” and maintained “strong capital, liquidity and risk ratios”, he noted.
Banks in the UAE are consolidating amid plans to have strong balance sheets, cut costs and boost profitability. Abu Dhabi Commercial Bank, Union National Bank and Al Hilal Bank are merging to create the third biggest lender in the UAE with combined assets of Dh420bn.
FAB also reported a 4 per cent year-on-year rise in fourth quarter net profit to Dh2.9bn on the back of lower costs and impairments.
FAB’s board has recommend a record cash dividend of 74 fils per share for 2018, which is equivalent to Dh8bn, a 6 per cent year-on-year increase.
FAB’s total assets at the end of 2018 climbed 11 per cent to Dh744bn from a year-earlier period. Loans and advances rose 7 per cent to Dh353bn, while customer deposits surged 18 per cent to Dh465bn for the period.
The lender, which completed the integration of legacy systems of NBAD and FGB in the fourth quarter of last year, said unification of these systems during the period was the final milestone of the merger.
“Having completed our UAE integration journey, which has been a core focus for the past two years, the bank will begin to unlock its full potential to continue to maximise shareholder value,” Mr Saeed said.
Among the operational highlights of last year was FAB receiving a licence from the Saudi Arabia Monetary Authority to establish a commercial banking business in the kingdom, the biggest banking market in the Arabian Gulf. The license allows FAB, through its subsidiary FAB Investment KSA, to operate three branches in the kingdom, it said last year.
Mr Saeed in October said that FAB will continue to grow its banking offerings in Egypt as it plans to ramp up its overseas businesses.
Updated: January 31, 2019 05:26 PM