Abu Dhabi: First Gulf Bank (FGB), the Abu Dhabi-listed bank, reported on Wednesday a 31 per cent jump in its net profit for the third quarter of this year, reaching Dh1.86 billion from Dh1.4 billion in the same quarter of 2015.
The jump in profits was due to property-related gains incurred in the quarter. The figure brings net profit for the first nine months to Dh4.5 billion — up five per cent year-on-year.
Revenues were also up for the first nine months, reaching Dh7.18 billion — a seven per cent increase from the Dh6.7 billion for the same period last year. Third quarter revenues were up 28 per cent year-on-year and included Dh473 million in gains on sale of investment properties.
“In line with our continued focus on optimising asset allocation, we strategically reduced our exposure to real estate through the disposal of some of our investment properties. This will enhance our focus on core banking activities and support higher revenue generation going forward,” said Andre Sayegh, chief executive officer at FGB.
In the third quarter of 2016, FGB’s impairment costs reached Dh420 million, marking a 32 per cent increase over the same period last year. This brings impairments for the first nine months to Dh1.19 billion — up 26 per cent year-on-year — as banks across the UAE continue to incur higher provisions to account for bad loans and non-performing loans.
Meanwhile, loans inched up one per cent to reach Dh156.2 billion at the end of September 2016, as deposits remained flat at Dh140.9 billion.
“Looking towards the future, we remain firmly focused on maintaining a strong balance sheet and healthy ratios. While we remain vigilant and risk-averse in light of today’s challenging global environment, we are confident that we will successfully meet our financial targets for this year and the years to come,” the CEO said.
In its management report, FGB also discussed updates on its planned merger with the National Bank of Abu Dhabi (NBAD), which is expected to be complete in the first quarter of 2017. FGB said that a senior management team was selected to lead the combined bank, and that announcement will be made public ahead of the completion of the merger.
The merger will dissolve FGB’s brand from the market and will see the bank getting delisted from the Abu Dhabi bourse as the merged entity will retain the NBAD brand name. The merger will create Middle East and North Africa’s largest bank, with Dh642 billion in total assets.
NBAD and FGB will each hold a general assembly meeting on December 7 to ask shareholders to vote on the merger.
