The UAE's biggest bank profit fell despite shrinking impairments
FAB says that third-quarter net profit slips 18 per cent amid drop in net interest income
First Abu Dhabi Bank, the UAE's biggest bank by market value, said that its third-quarter net profit fell 18 per cent, weighed down by a drop in both net interest income and fees and commission.
The decline in profitability the bank, which was created this year from the merger of the National Bank of Bank of Abu Dhabi and FGB, came despite a 21 per cent decline in money set aside to cover bad debt.
Net profit fell to Dh2.60 billion in the three months ended September 30 compared to Dh3.18bn in the same period last year. Net interest income dropped 5 per cent to Dh3.18bn versus Dh3.35bn in the corresponding period last year. Fees and commissions decreased 20 per cent to Dh788 million compared to Dh979m in the same period last year. Net impairment charges declined to Dh562m in the third quarter from Dh707m in the corresponding period last year.
"FAB's performance in the first nine months of 2017 demonstrates the group's resilience as it continues to achieve integration milestones and deliver solid results against an operating backdrop that is improving, yet remains challenging," said Abdulhamid Saeed, group chief executive officer of FAB.
"As we approach the end of 2017, I am very pleased with the excellent progress we have made in our integration journey. As we align our products and services, and further drive innovation and the right digital solutions across all areas of the business, we continue to place our clients first and work towards enhancing long-term customer experience across business groups."
The third quarter results of FAB missed the Dh2.75bn mean estimate of two analysts polled by Bloomberg News.
Banks have been facing a slowdown in lending that is crimping the profitability over the past year amid sluggish economic growth and subdued consumer confidence in the wake of a three-year oil slump.
While it will take the new lender up to two years to fully integrate the operations of the banks that formed FAB, there are a number of services that are available to customers of both banks at either branch networks that still operate under the banners of National Bank of Abu Dhabi and FGB.
The merger, which was completed at the beginning of April, created both the UAE’s biggest bank by assets and market value at Dh682bn and Dh120bn respectively.
Mr Saeed has said that the new brand and "Grow Stronger" motto will inspire and help the bank's stakeholders across its global network to grow and deliver top shareholder value through personalised and market-leading financial solutions and technology that put customers first.
"As we continue to build strong foundations to support the long term sustainable growth of our franchise, we are on track to meet our targets for the current year and our strong capital buffers provide us with ample room to deliver top returns for our shareholders," he said.