Abu Dhabi bank’s international operations contribute significantly to the impressive financial performance
Dubai: In a stellar first half of 2024 for UAE banks, First Abu Dhabi Bank (FAB) has reported a net profit of Dh8.4 billion, backed by revenues of Dh15.7 billion. This performance marks a notable increase from H1-2023’s net profit of Dh8.14 billion. The bank’s profit tally before tax totaled Dh10 billion, reflecting a 15 percent increase.
Key Highlights:
- Strong Results and Expansion: Hana Al Rostamani, Group CEO, highlighted the bank’s strong results and ongoing expansion both within the UAE and internationally. She emphasized that FAB is on track to achieve its return on tangible equity (RoTE) targets and deliver sustainable shareholder returns.
- International Operations: FAB’s overseas operations now account for 24 percent of the Group’s assets. Al Rostamani noted the bank’s efforts to leverage its international network to seize market opportunities globally, aligning with national ambitions and reinforcing its international franchise as a growth foundation.
- Market Presence: The bank has shown strong momentum in Egypt through FABMisr and healthy growth in other markets, including Saudi Arabia and India.
- Operational Gains: Net interest income for H1-2024 increased by 11 percent to Dh9.7 billion, driven by a high interest rate environment. Non-interest income also saw a significant rise of 26 percent, totaling Dh5.9 billion.
- Net Interest Margin: There was a 20 basis points rise in net interest margin (NIM) to 1.94 percent, reflecting higher benchmark rates and disciplined pricing and liquidity management.
- Capital Market Role: FAB played a central role in the UAE’s IPO market, raising Dh7 billion in capital market transactions during the period.
- Impairment Charges: The net impairment charges were higher at Dh1.9 billion, a 30 percent increase year-on-year, supporting strong provisioning levels. The non-performing loan (NPL) ratio remained steady at 3.7 percent.
- Future Outlook: Lars Kramer, Group CFO, emphasized that the bank’s fundamentals remain strong, with a solid capital base reinforced by a recent Tier 2 bond issuance. He also noted that the bank is well-positioned ahead of potential shifts in interest rates, with lending momentum and margin improvements expected to continue.
CEO’s Statement:
“Our outlook for the full year 2024 remains anchored in the strong fundamentals of the UAE and Abu Dhabi as global economic powerhouses and preferred hubs for investment, talent, and innovation,” said Hana Al Rostamani.
Conclusion:
FAB’s impressive financial performance in H1-2024 underscores its robust operational strategy and successful international expansion. As the bank continues to build on its strengths, it remains well-positioned to achieve its long-term growth and profitability targets.
