Abu Dhabi: First Gulf Bank (FGB) said yesterday its 2011 net profit rose 8 per cent on year to Dh3.71 billion, while the profit for the fiscal fourth quarter jumped 18 per cent to Dh1 billion from the corresponding quarter a year earlier.
The financial performance of FGB exceeded banking analysts' expectations.
"With a strong reliance on core banking combined with diversified sources of revenues and a very efficient model built on a low cost to income ratio, we have continued our progress to generate consistent results," Andre Sayegh, FGB chief executive officer, said in a statement.
"In general, the NPL [non-performing loan] trend continues to decline on the corporate and retail side."
Sayegh said despite challenging global economic and financial events, 2011 was a year of continued growth for the UAE.
"As we are heading into 2012, we maintain a positive outlook. Indeed, we are very well placed to support the infrastructure projects which have been recently approved by Abu Dhabi," he added.
Sayegh said the core banking businesses of the group contributed 98 per cent of the net profit, mainly retail, corporate, treasury, investments, Islamic and international presence.
"The local subsidiaries and associate companies of the group contributed with the remaining 2 per cent," he said.
FGB's shares remained unchanged yesterday on the Abu Dhabi Securities Exchange, closing at Dh15.55 in a bearish market.
The FGB board proposed the distribution of a cash dividend 100 per cent of capital or Dh1 per share. They also recommended the distribution of 100 per cent of capital as bonus shares.
Bonus share
"Each existing share would be eligible for one new share. The cash dividend and distribution of bonus shares are subject to the approval of the respective authorities to be followed by the approval of the ordinary general assembly of shareholders," said FGB.
The bank said during 2011 it managed to keep its expenses under control at Dh1.2 billion to achieve a cost to income ratio of 18.9 per cent, which is low by local and international standards, but slightly higher than the 17.8 per cent achieved in 2010. The bank's balance sheet showed a comfortable liquidity position.
Its liquid assets ratio increased to 13.9 per cent from 13.4 per cent at the end of 2010. The loan to deposit ratio was at 101 per cent by the end of 2011, down from 106 per cent in September.
Shabbir Ahmad Malek, banking analyst at EFG-Hermes, called FGB's financial performance a strong set of results bundled with a solid cash and bonus pay-out. "The bank continues to deliver encouraging results despite the challenging environment," Malek told Gulf News.
Naveed Ahmad, senior financial analyst at Kuwait-based Global Investment House, said: "FGB's posted a good set of results for 2011, exceeding our expectations by 15 per cent.
"Adjusting for minority interest, the bank's top line should exhibit growth of 4.5 per cent year-on-year. FGB's top-line grew 19 per cent year-on-year, helped by 10 per cent year-on-year in loans and a healthy rise in spreads.
"The bank's top-line was in line with our expectations with a variance of just 1 per cent," Ahmad said.
