NBF reports 2% rise in third-quarter profit as operating income climbs

National Bank of Fujairah reported a 2 per cent rise in third-quarter net profit as net interest and operating income climbed.

Net profit for the three months ending September 30 increased to Dh154.5 million, the lender said in a statement to the Abu Dhabi Securities Exchange, where its shares trade.

Operating income climbed to Dh439.4m, up from the Dh412.6m recorded for the third quarter of 2018.

"With slow global growth, volatile geopolitical conditions and a declining interest rate environment, NBF's resilient performance reinforces its ability to navigate through the changing operating environment with a resolute business focus coupled with healthy liquidity and strong capital adequacy," said Easa Al Gurg, NBF's deputy chairman.

In the first nine months of the year, the bank’s net profit rose to Dh511.6m, up 10.7 per cent on the corresponding period of 2018. Operating income increased 8.5 per cent year-on-year to Dh1.28 billion in the nine-month period, as net interest income and net income from Islamic financing and investment activities grew.

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Foreign exchange and derivatives income also saw growth of 9.1 per cent reaching Dh112.5m for the nine-month period, the bank said.

Meanwhile, operating expenses increased 11 per cent in the nine months to September 30 compared to the corresponding period of 2018 due to increased investments in multiple digital initiatives and infrastructure to improve customer service.

NBF recorded net impairment provisions of Dh350.7m for the nine-month period compared to Dh342.3m in 2018, as the bank used its improved operating performance to increase overall coverage levels to counteract a slowdown and credit stress in the market.

Assets at the end of September reached Dh42.5bn, up 6.8 per cent since the end of 2018.

Earlier this month, NBF successfully completed its inaugural public issuance of additional Tier 1 (AT1) capital securities of $350m (Dh1.3bn), which were well received by investors and resulted in an order book in excess of $1.5bn.

“The board believes in ongoing investment in the group to support future growth and preserving strong capital ratios. The inaugural public issuance of AT1 capital has enhanced capital adequacy, further strengthening NBF’s position to support its growth strategy and face the current market environment with confidence,” said Mr Al Gurg.