Finance House reports net profit of Dh63.2m in 2011

Abu Dhabi: The Abu Dhabi based Finance House PJSC has reported a consolidated group net profit of Dh63.2 million for the year ended 31 December 2011.

This translates to an earning of 21 fils per share.

Total assets grew to Dh3.31 billion, representing an increase of nearly 6 per cent over the figure of Dh3.12 billion as at 31 December 2010.

Net Interest Income from core business activities in 2011 has been relatively stable at Dh112 million compared to Dh117.5 million in 2010.

The marginal decline in net interest Income was in part due to lower interest earned on inter-bank placements where interest rates remained subdued for the most part of 2011 in comparison to 2010.

Net fee and commission income from core business activities registered a healthy growth of nearly 18 per cent, increasing to Dh23.8 million in 2011 from Dh20.2 million in 2010.

Mohammad Alqubaisi, Chairman Finance House, said: "Despite challenging market conditions and significantly tighter regulatory requirements, we are proud to maintain our profitable stance for the seventh successive year since inception. For a genuine private sector enterprise operating in the fiercely competitive UAE financial services sector, this is indeed a creditable achievement".

During the year, customer deposits continued to grow steadily to reach an all time high of Dh1.62 billion as at 31 December 2011 compared to Dh1.57 billion as at 31 December 2010.

"This is a remarkable achievement, especially in the back-drop of tighter liquidity witnessed in the inter-bank market during the fourth quarter of 2011 and bears testimony to the continued confidence that the market places in Finance House", Alqubaisi added.

Loans and Advances as at 31 December 2011 grew to Dh1.21 billion compared to Dh1.12 billion at the end of the previous year.

According to Alqubaisi: "Our Loans to Deposit Ratio as at 31 December 2011 stood at 75 per cent compared to 71 per cent in the previous year, reflecting both our cautious approach towards loan book growth during 2011 and the significant head room available for loan book growth in 2012 and beyond".

The board has recommended a cash dividend of 10 per cent subject to regulatory approvals. The dividend recommendation will result in 52 per cent of the net profit for the year being retained as part of Shareholders' equity to support future growth.

Looking ahead, Alqubaisi added: "We look forward to 2012 with optimism and are clearly poised for profitable growth as economic activity gathers momentum. Our strategy is sound and we have the necessary mechanisms & structures in place to exploit profitable opportunities, to continue managing risks well, and to maximise returns for our shareholders".