UAE mega-bank FAB cashes Dh8.4 billion as net profit for H1-2024
Abu Dhabi bank's international operations also weigh in with significant gains
Dubai: In what is proving to be a stellar first-half for UAE banks, Abu Dhabi’s FAB has capped that run with Dh8.4 billion in net profit on revenues of Dh15.7 billion. The net profit for H1-23 was Dh8.14 billion.
The profit tally before tax totaled Dh10 billion, from a 15 per cent increase.
With Mashreq Bank's results awaited, five of the leading banks in the UAE had combined net profits of around Dh34 billion during H1-24.
"FAB delivered another strong set of results while continuing to expand in our home market and across our international franchise," said Hana Al Rostamani, Group CEO. "We remain on track to achieving our RoTE (return on tangible equity) targets and delivering sustainable shareholder returns."
In fact, the overseas operations represents 24 per cent of the FAB Group assets as of now. "FAB continues to leverage its international network to capitalise on market opportunities across the globe," said Hana in a statement. "The bank is actively building and expanding business corridors in close alignment with national ambitions, reinforcing our international franchise as a foundation for growth and resilience."
This has meant 'continued strong momentum' in Egypt through FABMisr, as well as 'healthy growth' in other markets including Saudi Arabia and India.
Our (full-year 2024) outlook remains anchored in the strong fundamentals of the UAE and Abu Dhabi as a global economic powerhouse and preferred hub for investment, talent, and innovation
Operational gains
Net interest income for the H1-24 period was up 11 per cent to Dh9.7 billion from Dh8.8 billion a year ago, with the continuing high interest regime continuing to drive numbers. And then there was the 26 per cent growth in non-interest income, weighing in with Dh5.9 billion against Dh4.7 billion.
These growth 'reflect our efforts to enhance cross-sell and deepen client relationships, leveraging our differentiated strengths and international footprint," said Lars Kramer, Group CFO.
There was a 20 bps rise in net interest margin (NIM) to 1.94 per cent and which reflected the 'higher benchmark rates, disciplined pricing and liquidity management'.
FAB has also been helped by a central role in the series of IPOs that the UAE market is recording, and ‘helped raise Dh7 billion in capital market transactions’ in the latest financial period.
With our leading liquidity position and high-quality risk profile, we are upholding very strong fundamentals including a rock-solid capital base, which consolidated further following our Tier 2 bond issuance earlier this month (July)
"While lending momentum was healthy year-to-date, we have also benefited from incremental improvements in margins for the fourth consecutive quarter, reflecting dynamic balance-sheet management and optimal positioning ahead of a shift in interest rates," said Kramer. (The US Fed has been talking up the chances for the first time since March 2022. When the cut happens, it would immediately reflect in UAE lending rates too.)
Impairment charges
The net impariment charges came in higher, at Dh1.9 billion and 30 per cent up year-on-year, thus 'supporting strong provisioning levels'. The NPL (non performing loan) ratio was unchanged at 3.7 per cent from the June to end December 2023 period.
"During the first half of 2024, we continued to unlock long-term value through sustainable growth and diversification, strategic partnerships, and enhanced customer experience and service delivery through innovation and future technologies," said Hana.
More to follow...