FAB's Q1 net profit rises 3% on lower impairment charges | The National

FAB's Q1 net profit rises 3% on lower impairment charges | The National

First Abu Dhabi Bank, the UAE's largest lender by assets, reported a 3 per cent rise in net profit on the back of lower impairment charges and a broader economic recovery.

Net profit for the period ending March 31 rose to Dh2.5 billion ($680.6 million), the lender said in a statement to Abu Dhabi Securities Exchange, where its shares trade.

Total operating income was 4 per cent lower year-on-year at Dh4.4bn, as net interest income declined by 13 per cent to Dh2.7bn due to the lower interest rate environment. This was partially offset by higher non-interest income, which climbed 15 per cent to Dh1.7bn.

Net impairment charges during the period fell 36 per cent, indicating improving economic conditions and adequate provision buffers.

"FAB's strong foundations and competitive strengths continue to support the bank's ability to achieve a resilient performance in a challenging quarter characterised by a slower than expected recovery in business activity," said Hana Al Rostamani, group chief executive of FAB.

Banks across the Middle East are reporting improved performance due to lower impairments as the economic outlook improves on the back of an accelerated vaccine roll out.

Emirates NBD, Dubai's biggest lender by assets, said on Tuesday its first-quarter profit rebounded 12 per cent owing to lower impairment losses and operating expenses amid a broader economic recovery in its home market. Al Rajhi Bank, Saudi Arabia’s second-largest lender by assets, reported a 40 per cent increase in first-quarter net profit on Wednesday.

FAB's total assets grew 13 per cent year-on-year to Dh941bn, the lender said.

Customer deposits grew 14 per cent to Dh568bn, while loans and advances were down 1 per cent year-on-year, according to the bank.

FAB, formed through the merger of National Bank of Abu Dhabi and First Gulf Bank in 2017, is at the forefront of Abu Dhabi’s economic development efforts. It is also expanding regionally.

On Wednesday, the lender said it received approval from regulators to transfer the shares of Bank Audi Egypt, which it agreed to acquire in January. Following the share transfer, it will begin integrating Bank Audi into its existing Egyptian operations.

The consolidation of Bank Audi Egypt into FAB's Egypt operations will make it one of the biggest foreign banks in the Arab world's most populous nation, the lender said.