National Bank of Abu Dhabi said that its pro forma first-quarter profit that includes that of FGB, with which it merged this month, rose 12.4 per cent amid rising revenues and cost savings garnered from the combination.
The gain came as net interest income as well as net fees and commissions dropped in the first quarter.
Net profit rose to Dh2.93 billion in the first three months of the year compared with Dh2.6bn in the same period last year, the bank said. Net interest and Islamic financing income dropped 4.9 per cent to Dh3.2bn in the first quarter from Dh3.37bn in the same period last year. Net fees and commissions decreased 14.7 per cent to Dh799 million from Dh936m, while other non-interest income, understood to comprise largely of unspecified investment gains, surged 145.5 per cent to Dh1.2bn from Dh487m.
Meanwhile, money set aside to cover debt gone sour declined 3.9 per cent in the first quarter to Dh645m versus Dh671m, the bank said.
After the merger on April 1, FGB was delisted from the Abu Dhabi Securities Exchange. NBAD said that it would seek shareholder approval on April 24 to change the name of the combined entity to First Abu Dhabi Bank from National Bank of Abu Dhabi.
“With the merger of FGB and NBAD now effective, we are starting First Abu Dhabi Bank’s journey on a solid footing thanks to robust fundamentals at the end of Q1, 2017, positioning us well to successfully execute our integration plan,” said Abdulhamid Saeed, the group chief executive of the combined bank.
“We have already achieved a number of key milestones since the completion of the merger, which is a strong testament to the exceptional merits of bringing two highly complementary businesses together, as we already began to draw on our combined strengths and realise synergies for the benefit of all our stakeholders.”
The bank said this month that cost synergies are forecast at Dh1bn, twice the initial estimate of Dh500m. They would occur over a period of three years and would be driven by a reduction in branches and headcount.
At the same time, the bank said it was targeting a higher than expected return on equity, a measure of profitability, of 16 per cent to 17 per cent by 2020.
First Abu Dhabi Bank also said the cost of integration would rise to Dh1.1bn from Dh600m over three years.
Those costs will comprise mostly of write-offs of IT assets as well as severance packages. Analysts said the revision of these estimates should be regarded as investments that will pay off in the long run.
The merger, which was approved by both banks’ shareholders on December 7, was done in part to cut down on costs by removing duplicate posts and sharing resources.
Even though NBAD, the biggest bank by assets in the UAE, had made headway in building its consumer banking business, it will get a boost from joining forces with FGB, which has more loans to individuals on its books.
Retail lending accounts for about 40 per cent of FGB’s total lending book, while NBAD’s consumer lending portfolio makes up just 17 per cent of its outstanding loans.
mkassem@thenational.ae
Follow The National's Business section on Twitter
What are the influencer academy modules?
- Mastery of audio-visual content creation.
- Cinematography, shots and movement.
- All aspects of post-production.
- Emerging technologies and VFX with AI and CGI.
- Understanding of marketing objectives and audience engagement.
- Tourism industry knowledge.
- Professional ethics.
UAE central contracts
Full time contracts
Rohan Mustafa, Ahmed Raza, Mohammed Usman, Chirag Suri, Mohammed Boota, Sultan Ahmed, Zahoor Khan, Junaid Siddique, Waheed Ahmed, Zawar Farid
Part time contracts
Aryan Lakra, Ansh Tandon, Karthik Meiyappan, Rahul Bhatia, Alishan Sharafu, CP Rizwaan, Basil Hameed, Matiullah, Fahad Nawaz, Sanchit Sharma
Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
New UK refugee system
- A new “core protection” for refugees moving from permanent to a more basic, temporary protection
- Shortened leave to remain - refugees will receive 30 months instead of five years
- A longer path to settlement with no indefinite settled status until a refugee has spent 20 years in Britain
- To encourage refugees to integrate the government will encourage them to out of the core protection route wherever possible.
- Under core protection there will be no automatic right to family reunion
- Refugees will have a reduced right to public funds
White hydrogen: Naturally occurring hydrogen
Chromite: Hard, metallic mineral containing iron oxide and chromium oxide
Ultramafic rocks: Dark-coloured rocks rich in magnesium or iron with very low silica content
Ophiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on land
Olivine: A commonly occurring magnesium iron silicate mineral that derives its name for its olive-green yellow-green colour
Squads
Pakistan: Sarfaraz Ahmed (c), Babar Azam (vc), Abid Ali, Asif Ali, Fakhar Zaman, Haris Sohail, Mohammad Hasnain, Iftikhar Ahmed, Imad Wasim, Mohammad Amir, Mohammad Nawaz, Mohammad Rizwan, Shadab Khan, Usman Shinwari, Wahab Riaz
Sri Lanka: Lahiru Thirimanne (c), Danushka Gunathilaka, Sadeera Samarawickrama, Avishka Fernando, Oshada Fernando, Shehan Jayasuriya, Dasun Shanaka, Minod Bhanuka, Angelo Perera, Wanindu Hasaranga, Lakshan Sandakan, Nuwan Pradeep, Isuru Udana, Kasun Rajitha, Lahiru Kumara
Tips from the expert
Dobromir Radichkov, chief data officer at dubizzle and Bayut, offers a few tips for UAE residents looking to earn some cash from pre-loved items.
- Sellers should focus on providing high-quality used goods at attractive prices to buyers.
- It’s important to use clear and appealing photos, with catchy titles and detailed descriptions to capture the attention of prospective buyers.
- Try to advertise a realistic price to attract buyers looking for good deals, especially in the current environment where consumers are significantly more price-sensitive.
- Be creative and look around your home for valuable items that you no longer need but might be useful to others.
UAE currency: the story behind the money in your pockets
COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
