Abu Dhabi-based Mega Bank FAB posted a huge net profit of 8 billion dirhams in the first half of 2022, up 50% year on year.
“Despite heightened global market volatility, our core businesses maintained solid growth momentum reflecting healthy pipeline execution across our diversified franchise, and our ongoing strategic focus on deepening client relationships,” said Hana Al Rostamani, Group CEO at FAB.
On lending, FAB’s exposure is at Dh459 billion (including Islamic financing), up by 6 percent sequentially and 12 percent yearly. Customer deposits were Dh648 billion at the end of June, while a Liquidity Coverage Ratio (LCR) of 135 percent ‘underlines a strong position. The NPL (Non-Performing Loan) ratio and provision coverage were at 3.6- and 100 percent, respectively.
“Almost Dh50 billion (in) net incremental lending was extended by FAB year-to-date, which is a record for the Group for any half-year period,” the CEO added. “This demonstrates buoyant regional activity, FAB’s leading origination capabilities, and the fundamental strength of our balance sheet as we continued to deploy our resources and expertise to support our client franchise with their local and cross-border banking needs.”
FAB’s profit was based around a total income of Dh12.5 billion, a gain of 31 percent from a year ago. The revenue spike also includes the Dh3.1 billion net gain from selling a majority stake in the payments processing firm Magnati.
Another major gain for FAB during the period was the 9 percent lower impairment charges, which comes to Dh1 billion net.
In the second quarter alone, the net profit was at Dh2.9 billion, up 13 percent sequentially.
During this period, “all our core businesses delivered top-line growth sequentially, led by a double-digit growth in investment banking and corporate and commercial Banking, which is a strong result in the context of adverse global market conditions.”
“This was helped by strong volumes, early benefits from rising interest rates, and healthy client activity in global markets consistent with our strategy to enhance cross-sell. Risk was prudently managed across the Group, while the year-on-year growth in operating expenses reflects continued investments in franchise growth and transformation.”
The FAB said it was “in the best position” to continue to benefit from the rate hike. The end of the rate hike took place overnight. However, due to the increasing volatility of the global market, “sustainable rise in global inflation, and rapidly evolving monetary policy”, great care must be taken.