First Abu Dhabi Bank reports Dh2.5 billion Q1 net profit, up 3 %
Results supported by cost management, lower provisions and improved non-interest income
Dubai: First Abu Dhabi Bank (FAB), the UAE’s largest bank, reported a group net profit of Dh 2.5 billion in the first quarter of 2021, up 3 per cent compared to Dh2.4 billion in the first quarter of 2020.
“FAB's strong foundations and competitive strengths continue to support the bank's ability to achieve a resilient performance in a challenging quarter characterised by a slower than expected recovery in business activity,” said Hana Al Rostamani, Group Chief Executive Officer of FAB.
Total operating income at Dh 4.4 billion was down 4 per cent year-on-year as lower net interest income due to the rate cuts in 2020, was partially offset by higher other income.
Balance sheet
FAB's total assets at Dh941 billion was up 2 per cent year-to-date, and 13 per cent year-on-year. Customer deposits at Dh568 billion grew 5 per cent year-to-date and 14 per cent year-on-year.
Loans and advances were down 2 per cent year-to-date and 1 per cent year-on-year.
FAB's strong foundations and competitive strengths continue to support the bank's ability to achieve a resilient performance in a challenging quarter characterised by a slower than expected recovery in business activity.
Asset quality
At the close of the quarter non performing loans (NPL) ratio was at 4 per cent, provision coverage at 96 per cent.
Impairment charges at Dh470billion, up 48 per cent sequentially, and down 36 per cent year-on-year, reflecting improving economic conditions, and adequate provision buffers.
While operating expenses reduced 3 per cent as the group maintained strong cost discipline, the bank continues to invest in digital and strategic initiatives.
“In addition to our strong performance throughout the quarter, we have made significant progress on the delivery of our strategic priorities, which represent key milestones for both FAB and our industry. We completed the carve out of our payments business and launched “Magnati”, a unique and intelligent payments platform,” said Al Rostamani
Liquidity and capital
The bank preserved strong liquidity and funding ratios during the period, a solid capital position. Liquidity coverage ratio (LCR) at 141 per cent underlines strong liquidity position.
At the close of the first quarter Common Equity Tier 1 (CET1) at 13.7 per cent and capital adequacy ratio at 16.9 were well above regulatory requirements.
“As economic and business activity gather further momentum, I am confident that we are well positioned to benefit from the opportunities that lie ahead for us and for our customers, and to continue to create sustainable value for all our stakeholders.” Al Rostamani said.