Dubai: National Bank of Fujairah (NBF) posted a net profit of Dh275.1 million in the first half of 2016 down 9.4 per cent compared to Dh303.6 million in the corresponding period of 2015.
For the second quarter of this year the bank reported a net profit of Dh124.59 million compared to Dh154.09 million in the same quarter last year.
While the bank’s operating income grew of 8.5 per cent in the first six months of the year, net interest income and net income from Islamic financing and investment activities grew by 5.8 per cent. Net fees and commission income was up by 6.6 per cent. Foreign exchange and derivatives income marked a 26.7 per cent growth while income from investments doubled compared to the first half of 2015.
“The bank has delivered a good set of results in the face of rapidly-changing market conditions, underpinned by its strong focus and commitment to long term sustainability,” said Easa Saleh Al Gurg, Deputy Chairman of NBF.
The bank’s loans and advances and Islamic financing receivables of Dh21.1 billion were up by 7.3 per cent from Dh19.7 billion at 2015 year end, and up by 14.6 per cent compared to the first of 2015. Customer deposits and Islamic customer deposits of Dh22.6 billion were up by 4.7 per cent from Dh21.6 billion at 2015 year end, and up by 16.2 per cent year on year.
Operating expenses increased by 5.8 per cent, reflecting ongoing investment in NBF’s business and service platforms. Cost-to-income ratio improved to 34.8 per cent compared to 35.7 per cent at the close of the first half of 2015. Operating profit was up 10.1 per cent at Dh429.8 million compared to Dh390.5 million in the corresponding period of 2015.
Loan loss provisions
Net impairment losses were up 78 per cent to Dh154.7 million compared to Dh86.9 million in the corresponding period of 2015. “This reflects NBF’s prudent loan loss provisions in response to the more challenging operating environment,” the bank said in a statement.
The NPL ratio was 4.76 per cent compared to 4.72 per cent as at year-end 2015. Total provision coverage ratio improved to 109.1 per cent compared to 107.7 per cent at as December 2015.
The bank continued to maintain strong capital adequacy and lending to stable resources ratios were at 17.9 per cent and 86.3 per cent respectively, while return on average assets was 1.8 per cent and return on average equity was 12.6 per cent.
The bank said a decline in first half profits comes year-on-year against an exceptionally strong first half of 2015 and to secure prudent provisions in view of the credit stress in the market.
“NBF’s resilient operating performance enables it to face the uncertain operating environment confidently and provides a strong base for future growth,” said Al Gurg.
