FAB reports net profit of Dhs3.9 billion in first quarter

FAB has announced a strong start to 2023, with impressive returns resulting from their growth strategy. The Group reported a net profit of Dhs3.9 billion in the first quarter, with key performance indicators indicating significant growth across all business segments and product lines.  Operating income increased by 51% year-on-year, driven by strong growth in net interest and non-interest income.

The Q1’23 net profit rose by 60% sequentially, leading to an annualised Return on Tangible Equity (RoTE) of 18.5%. Excluding Dhs2.8 billion Magnati-related gains in Q1’22, the net profit was up 70% year-on-year. The cost-to-income ratio improved to 25.1%, compared to 33.2% in Q1’22. Impairment charges (net) were at Dhs798 million, implying an annualised cost of risk of 62 bps.

Hana Al Rostamani, Group CEO, said, ‘’2023 is off to a strong start with the Group delivering an operating income of Dhs6.7 billion, a 60% growth in net profit sequentially to AED 3.9 billion and a return on tangible equity of 18.5% driving strong capital accretion in the first quarter. Building on a record year in 2022 and prudent actions taken in the fourth quarter of last year, the notable improvement across these metrics was driven by sustained momentum across all business segments and product lines, cost and risk discipline, and our proven ability to navigate evolving market conditions.

‘’The enhanced contribution from our international operations further demonstrates the strength of our diversified franchise and solid delivery against our growth strategy,” she added.

Despite turbulence in the global banking industry, FAB continues to operate on a sound balance sheet foundation, including a solid capital position and a very strong liquidity profile. The Group attracted Dhs80 billion in customer deposits in the first quarter alone, highlighting the depth of their relationships and their superior credit ratings of AA- or equivalent as one of the safest banks worldwide.

Emirates Islamic posts Dhs601m profit: Emirates Islamic, a leading Islamic financial institution in the UAE, has reported a record net profit of Dhs601 million for the first three months of 2023, reflecting a remarkable increase of 76% year-on-year. The Bank’s total income surged by 74%, driven by higher core revenues due to improved financing and deposit mix with higher profit rates, coupled with a rise in non-funded income. Operating profit also recorded significant growth, showing a remarkable 103% year-on-year increase.

The Bank’s strong operating performance was underpinned by higher funded income and non-funded income, although operating expenses increased by 34% year-on-year due to the Bank’s investment in future growth. Nevertheless, the cost to income ratio improved by 10% year-on-year to 33.3%. Despite the increase in impairment allowances by 424% year-on-year due to financing growth and increased overlays, the Bank still maintained a strong coverage ratio, which is a testament to its prudent risk management.

The Bank’s impressive performance can be attributed to its strong capital and liquidity, combined with a healthy deposit mix, which enabled it to continue supporting customers. Total assets grew by 4% from the end of 2022 to Dhs77.9 billion, while customer financing and customer deposits increased by 3% and 2% respectively from the end of 2022. The Bank’s credit quality also improved, with the non-performing financing ratio dropping to 6.8% and a strong coverage ratio of 133%.

Hesham Abdulla Al Qassim, Chairman of Emirates Islamic, commented on the Bank’s excellent performance, stating that the bank’s growth in net profit and total income was driven by increased customer confidence and a rise in retail product demand. He also highlighted the successful pricing of the Bank’s inaugural AED 1 billion dirham-denominated sukuk, which will expand financing options for UAE corporations with Shariah-compliant needs and enhance the development of the Ministry of Finance’s dirham yield curve.

Salah Mohammed Amin, CEO of Emirates Islamic, emphasised that the Bank’s strong results reflect its focus on providing innovative financial solutions to its customers while enhancing the overall customer experience. He also noted that the Bank’s balance sheet remains robust, demonstrating the strength of its operating capabilities and prudent risk management.