Dubai: The Abu Dhabi mega-bank FAB’s first quarter net profit has soared to Dh5.1 billion, a strong 54 per cent gain over last year. This is the bank’s highest ever quarterly profit to date. The total income for the period was boosted by a Dh2.8 billion net gain from selling a majority stake in its payments processing subsidiary Magnati. That swelled overall income to Dh7.3 billion.
The deal with Brookfield, which owns 60 per cent in Magnati, paves the way for “accelerated growth with a long-term strategic partner as we remain at the forefront of the region’s payments and digital agenda,” said Hana Al Rostamani, Group CEO in a statement.
"Internationally, we continued to expand our presence into new, targeted markets. Egypt remains a strategically important market for the Group, and the integration of Bank Audi Egypt is on track for completion within the next few months. Our Shanghai branch became operational in March, and we opened a representative office in Iraq, serving as a strategic addition to our geographic footprint as the UAE continues to be one of Iraq’s most important trading partners." (The bank, however, has pulled out from a plan to acquire Egyptian investment bank EFG Hermes.)
Dh 600 b
FAB's total customer deposits as of end March, 2022
The bank said its "core underlying performance was healthy, driven by higher net interest income, a pick-up in fees and commissions and the positive contribution from Bank Audi Egypt, helping offset lower trading and investment income".
Despite ongoing global uncertainty, we see significant momentum in the UAE which FAB is very well positioned to support and capitalise on
Loans position
FAB continues to see its loan book growing, this time by 6 per cent and at improving margins too. The CASA (Current Account Savings Account) number was at Dh22 billion, which is 52 per cent of overall customer deposits. “In an increasing interest rate environment, this places us in good stead to deliver higher returns in the coming quarters,” said James Burdett, Group CFO.
"Fee-generation remained strong demonstrating healthy pipeline execution across the business, in addition to increased client flow activity in global market sales, which helped partially offset softer trading and investment income. Sales momentum was also sustained in consumer banking across key products underlining growing consumer confidence."
- Loans, advances and Islamic financing at the end of March was at Dh434 billion, a gain of 15% on the Dh378 billion a year ago.
- Net interest margin is at 1.52% from 1.47% a year ago. FAB will be looking to make headway on this score.
- Impairment charges were Dh457 million, down from end December 2021’s Dh715 million and also from last year March’s tally of Dh470 million.
