First Abu Dhabi Bank group operating income up 44% at Dh13.6 billion
Net impairment charges were recorded at Dh1.47 billion, up 42 per cent year-on-year
Abu Dhabi: First Abu Dhabi Bank announced a record first-half 2023 net profit of Dh8.1 billion on Thursday, the highest ever achieved by the group in a half-year period.
Group operating income amounted to Dh13.6 billion, an increase of 44 per cent compared to the same period last year. Growth was driven by sustained momentum across all business lines, continued strength in fee-based businesses, and higher market-related income.
Net impairment charges were recorded at Dh1.47 billion, up 42 per cent year-on-year, translating into an annualised cost of risk at 58 basis points.
The bank’s loans, advances and Islamic financing stood at Dh483 billion, up 5 per cent year-to-date, while customer deposits were reported at Dh745 billion, up 6 per cent year-to-date.
Current account and savings account (CASA) balances hit at a new high of Dh333 billion during the period, reflecting strong performance in cash management, consistent growth in the client base and savings propositions.
“With its robust fundamentals, solid financial standing, and total assets surpassing Dh1.1 trillion ($312 billion), FAB is among the largest and strongest financial institutions globally, with a combined credit rating of AA- or equivalent. Moreover, the recent rating affirmations by Moody’s and Standard & Poor’s are a compelling testament to the group’s resilience through the cycles,” said Group CEO Hana Al Rostamani.
“The group’s achievements demonstrate steady progress against our growth strategy and strengthen our position as the financial institution of choice. Throughout the quarter and in the first half of this year, we have fulfilled our commitment to delivering the best financial and banking products and services to our clients across our diversified franchise, while empowering the UAE’s status as a global financial hub.”
On a quarterly basis, Q2’23 net profit stood at Dh4.2 billion, up 7 per cent sequentially and 61 per cent year-on-year, while operating income was Dh6.8 billion, up 37 per cent y-o-y. Operating costs stood at Dh1.7 billion, up 3 per cent quarter-on-quarter and 9 per cent y-o-y on continued investments. Net impairment charges were down 15 per cent q-o-q at Dh676 million.
Lars Kramer, Group Chief Financial Officer at FAB, said: “FAB posted a very strong set of financial results, as evidenced by record underlying revenue and profits both in the second quarter and in the first half of 2023. Return on tangible equity improved substantially to 18.6 per cent, with solid capital accretion lifting Group CET1 to 13.6 per cent as of June-end 2023.”
“Group operating efficiency improved significantly year-on-year, with cost-to-Income ratio at 25.2 per cent from 32.2 per cent in the first half of 2022. FAB continues to operate from a strong foundation with a unique liquidity and funding profile, and ample capacity to continue to effectively support our clients in our home market and across our strategic footprint. In the current high interest rate environment, we will continue to prudently manage risk, preserve a strong and resilient profile, and remain laser focused on enhancing group returns.”