Dubai: National Bank of Fujairah (NBF)reported a 63.85 per cent jump net profits to Dh170.9 million last year, compared to Dh 104.3 million in 2009, the company said in a statement.

The bank's operating income grew by 12.2 per cent and operating costs were reduced by 7.9 per cent while cost to income ratio improved from 44.5 per cent to 36.6 per cent.

The provision for loan losses was Dh205.0 million for the year compared to Dh214.3 million for 2009. The Bank continues to be prudent and proactive in providing for potential loan losses in view of ongoing uncertain market conditions.

"Results were driven by strong core business performance and robust cost and balance sheet management in difficult credit conditions," it said.

"Strong capital adequacy and advances to deposits (AD) ratios of approximately 21% (Tier 1 Ratio:14%) and 87.2% are well ahead of Central Bank minimum requirements."

Net interest income grew by 10.2% to Dh360.1 million compared to Dh326.9 million in 2009. Non-interest income, at Dh207.9 million, was 15.8% higher than the Dh179.6 million in 2009. The bank improved its exchange income of Dh42.3 million compared to Dh35.3 million. At the end of the year, the bank's total assets stood at Dh12.9 billion and total shareholders' equity reached at Dh1.8 billion.

The bank's board has recommended cash dividend of 6.2 per cent of paid-up capital.

 

Sheikh Saleh Bin Mohammed Al Sharqi, NBF chairman commented: "The Bank has grown its core earnings which, coupled with a sharper focus on costs and balance sheet management, has helped absorb credit losses and grow profitable operations. I, on behalf of the Board of Directors, am pleased to recommend a distribution of profits by way of cash dividends of 6.2% of the paid-up capital."

NBF recorded its highest operating profit of Dh375.9 million in 2010 compared to Dh318.6 million in 2009. Operating income increased by 12.2% to Dh568.0 million in comparison to Dh506.5 million for 2009, reflecting strong core business performance and balance sheet management. Operating expenses of Dh207.7 million were 7.9% lower than 2009 operating expenses of Dh225.5 million. The Bank's cost to income ratio improved to 36.6% as compared to 44.5% in 2009.

Sir Easa Saleh Al Gurg, Deputy Chairman commented: "The Bank's performance is a testament to the success of its well-balanced strategy in these difficult times. The Bank leveraged its strong liquidity and capital position and grew its business prudently and efficiently in the local economy. Our business in Fujairah, in particular, saw a record growth in 2010. The Bank will continue to improve its market position by strengthening its customer-centric approach and product focus, and will continue to seek new lending opportunities as the market continues to recover."

A gain on investment of Dh15.7 million was recognised through the statement of income, compared to Dh37.6 million for the corresponding period of 2009. The decline is in line with the Bank's strategy to reduce market risk and an enhanced focus on its core business. Investment in funds was reduced to Dh42.3 million.

The loan book grew by 11.5% in an environment of subdued credit demand and reflected the Bank's strong relationships with its core customers. Total assets grew to AED 12.9 billion from AED 11.9 billion at the end of 2009.

NBF's capital adequacy ratio and liquidity position continues to be one of the strongest in the UAE. As of 31 December, the Bank's AD ratio was 87.2% after absorbing a 6% drop in syndicated borrowing as its maturity falls within six months. NBF's syndicated borrowing amounting to USD 210 million is set to mature on 25 June 2011.

Incorporated in 1982, NBF is a full services corporate bank with strong wholesale banking and trade finance expertise. NBF's key shareholders include the Government of Fujairah, the Government of Dubai and business leader Sir Easa Saleh Al Gurg.