Dubai: National Bank of Fujairah (NBF) posted a net profit of Dh76.2 million for the first half of 2021, up 17.1 per cent year on year.
The net profit was up 430.8 per cent for the three month period ended 30 June 2021 compared to the corresponding period of 2020.
NBF achieved an operating profit growth of 11.3 per cent for the three month period ended 30 June 2021 over the corresponding period of 2020; and 2.3 per cent compared to Q1 2021. Operating profit stood at Dh502 million for the six-month period compared to Dh521.4 million in the corresponding period of 2020.
Bank’s operating income grew 7.8 per cent during the second quarter over the corresponding period of 2020; and 1.1 per cent compared to Q1 2021. Operating income stood at Dh724.5 million in H1 2021 compared to Dh755.6 million in the corresponding period of 2020.
Net interest income and net income from Islamic financing and investment activities stood at Dh469.1 million for first half of the year compared to Dh 511.9 million in the corresponding period of 2020. Net fees, commission and other income rose 6.1 per cent to Dh 166.2 million for the first half of the year compared to Dh156.7 million in the corresponding period of 2020.
“Our H1 2021 results exhibit the Group’s resilience; marking the return to profitable growth in line with the bank’s strategy to recognize the substantial negative impact from a few exceptional exposures and COVID-19 pandemic in 2020 relatively early to achieve a recovery in asset quality this year. The current economic outlook depicts signs of a return to growth on the back of UAE government measures against the aftermath of COVID-19,” said Dr Raja Al Gurg, Deputy Chairperson of NBF.
Costs
Operating expenses reduced by 5 per cent to Dh222.6 million compared to Dh234.2 million in the corresponding period of 2020. Cost-to-income ratio marginally reduced to 30.7 per cent compared to 31 per cent in the corresponding period of 2020 reflecting the lower operating income.
Balance sheet
Bank’s total assets rose by 3 per cent to reach Dh41.1 billion compared to Dh39.9 billion at 2020 year-end and Dh44.5 billion as at June 30, 2020.
Loans and advances and Islamic financing receivables rose by 1.7 per cent to reach Dh25.3 billion compared to Dh24.8 billion at 2020 year-end and Dh26.4 billion as at 30 June 2020.
Investments and Islamic instruments stood at Dh4.9 billion compared to Dh5.2 billion at 2020 year-end and Dh 4.0 billion at the close of the first half of 2021. Customer deposits and Islamic customer deposits stood at the 2020 year-end level of Dh29.8 billion compared to Dh32.9 billion as at June end 2020. CASA deposits improved to 40.6 per cent of total customer deposits compared to 38 per cent as at year end 2020.
Asset quality
NBF made net impairment provisions of Dh425.7 million for the six month period ended 30 June 2021, down 6.7 per cent compared to Dh456.3 million in the corresponding period of 2020. During the period, the bank’s impairment reserve reduced to Dh270.2 million compared to Dh283.5 million as at 31 December 2020. Total provision coverage ratio (including impairment reserves) stood at 93.8 per cent compared to 91.8% as at 31 December 2020. The NPL ratio stood at 10 per cent compared to 10.1 per cent as at 31 December 2020. Excluding a few exceptional group exposures, the NPL ratio would reduce to 6.8 per cent.
Liquidity and capital
Ample liquidity was maintained with lending to stable resources ratios at 79.3 per cent (2020: 82.1%) and eligible liquid assets ratio (ELAR) at 22.5 per cent (2020: 20.8%),
The capital adequacy ratio (CAR) is being kept at a recent high for the bank to support the bank’s ability to ride out any challenges arising out of the evolving operating landscape.
