Dubai: National Bank of Fujairah (NBF) posted a net profit of Dh75.4 million for the three month period ended 31 March 2020, up 85.9 per cent compared to fourth quarter of 2019 and down 55 per cent compared to Dh167.6 million in the corresponding period of 2019.
Operating income at Dh417.5 million showed marginal growth of 0.5 per cent compared to the corresponding period of 2019. NBF achieved an operating profit of Dh293.3 million for the three month period with a growth of 2.9 per cent compared to Dh285.1 million in the corresponding period of 2019 and 3.7 per cent growth over Q4 2019.
“Q1 2020 saw an unprecedented change to the world economy with recessionary trends building rapidly across the globe, oil prices reaching exceptionally low levels and massive government support programmes being rolled out, as global economies remain on lock-down due to the COVID-19 pandemic. Despite this backdrop, NBF achieved positive operating profit growth of 2.9 per cent reaching Dh293.3 million underscoring the resilience of its business model and proactive asset and liability management,” said Dr Raja Al Gurg, Deputy Chairman
NBF’s net interest income and net income from Islamic financing and investment activities and net fees, commission and other income stood at Dh276.3 million and Dh89.3 million respectively compared to Dh280.4 million and Dh90.5 million in the corresponding period of 2019.
Balance sheet
Total assets rose by 1.1 per cent to reach Dh43.3 billion from Dh42.8 billion at 2019 year-end, up by 8.1 per cent from March 31, 2019. Loans and advances and Islamic financing receivables reached Dh27.2 billion from Dh27.1 billion at 2019 year-end, up by 3.7 per cent from March 31, 2019. Customer deposits and Islamic customer deposits stood at Dh32 billion compared to Dh31.9 billion at 2019 year end, up by 6 per cent from 31 March 2019.
Provisions
At the close of the first quarter, the bank recognised stage 3 impairment provisions towards an exceptional group exposure and enhanced stage 1 and 2 provisions for the potential impact of COVID-19.
NBF made net impairment provisions of Dh217.9 million for the three month period compared to Dh117.5 million in 2019. Total provision coverage ratio (including impairment reserves) stood at 96.3 per cent compared to 107.3 per cent at yearend 2019.
The NPL ratio stood at 6.7 per cent compared to 5.4 per cent as at 31 December 2019.
Liquidity and capital
Strong liquidity was maintained with lending to stable resources ratios at 84.9 per cent compared 85.9 in the same period last year and eligible liquid assets ratio (ELAR) at 18.9 per cent compared to 21.7 per cent last year. The capital adequacy stood at 17.3 per cent with tier 1 ratio of 16.2 per cent and CET 1 ratio of 12.6 per cent at the close of Q1, 2020.
