First Abu Dhabi Bank (FAB), the UAE’s largest bank reported a net profit of Dh5.4 billion for the first half of 2021, up 11 per cent year on year. Image Credit: Clint Egbert/Gulf News

Dubai: First Abu Dhabi Bank (FAB), the UAE’s largest bank reported a net profit of Dh5.4 billion for the first half of 2021, up 11 per cent year on year.

For the second quarter net profit increased by 16 per cent sequentially and 19 per cent year-on-year to Dh2.9 billion, driven by a double-digit growth in non-interest income.

Improved profits were driven by revenue growth from a solid performance across core businesses despite headwinds from rate cuts, increased contribution from our international operations following the recent acquisition in Egypt, and lower impairment charges.

“Our solid results in the first half of 2021, with Group net profit increasing 11 per cent year-on-year to Dh5.4 billion, are a testament to the successful execution of our strategic priorities, and our tenacious ability to drive our competitive position while capitalising on the opportunities presented by an improved backdrop,” said Hana Al Rostamani, Group CEO of FAB.

FAB’s H1 2021 operating incomes were at Dh9.6 billion, up 2 per cent year-on-year. Operating costs at Dh2.8 billion, up 7 per cent year-on-year reflecting ongoing investments in strategic and digital initiatives.

Bank’s strong results were driven by 18 per cent revenue growth sequentially, led by a very strong performance in investment banking businesses, sustained results in personal banking, and higher contribution from international operations following Bank Audi Egypt acquisition.

Balance sheet

FAB’s total assets were at Dh944 billion, up 3 per cent year-to-date. Customer deposits were up 6 per cent year-to-date at Dh575 billion and 1 per cent sequentially. Loans and advances grew 3 per cent to Dh399 billion at the close of the first half of 2021.

Cost discipline was maintained amid ongoing investments in strategic and digital initiatives with cost-to-income ratio (ex-integration costs) at 28.3 per cent.

Asset quality

Impairment charges were at D 1.1 Billion, down 36 per cent year-on-year, reflecting improving economic conditions, and adequate provision buffers. NPL ratio was at 3.9 per cent, with provision coverage at 97 per cent.

“Impairment charges were lower year-on-year on the back of a significantly improved backdrop compared to the economic conditions at the height of the pandemic during the first half of 2020, founded on a high quality asset portfolio underpinned by prudent risk management,” said James Burdett, Group Chief Financial Officer.

Liquidity and capital

The bank continued to maintain strong liquidity position with liquidity coverage ratio at 119 per cent. At the close of the first half the bank had Common Equity Tier 1 (CET1) at 13 per cent, comfortably above regulatory requirements.

“Our strong capital generation capacity through higher retained earnings and continued optimisation of our risk-weighted assets is enabling us to maintain solid capital ratios, meet evolving regulatory requirements, and build the right foundations to support business growth and sustainable shareholder returns,” said Burdett.