First Abu Dhabi Bank, the UAE's largest lender by assets, reported an annual 45 per cent increase in its second-quarter net profit, amid an income boost from the country's continuing economic momentum.
Net income attributable to shareholders for the three months to the end of June climbed to Dh4.2 billion ($1.14 billion), the bank said in a filing on Thursday to the Abu Dhabi Securities Exchange, where its shares are traded.
Operating income for the reporting period climbed to Dh6.8 billion, up 37 per cent year on year, driven by double-digit growth in interest and non-interest income.
Net interest income increased 39 per cent to Dh4.3 billion in the second quarter from the same period a year earlier.
Total net interest income and income from Islamic financing and investing products for the second quarter rose by 33 per cent to Dh4.49 billion on an annual basis.
“The group’s achievements demonstrate steady progress against our growth strategy and strengthen our position as the financial institution of choice,” said Hana Al Rostamani, FAB group chief executive.
Positive growth momentum was sustained across all business lines, she said.
Throughout the period, “we have fulfilled our commitment to delivering the best financial and banking products and services to our clients across our diversified franchise, while empowering the UAE’s status as a global financial hub”, Ms Al Rostamani added.
Banks in the UAE, like their regional peers, are benefiting from a rise in interest rates. Most central banks in the six-member economic bloc of the GCC peg their currencies to the US dollar and follow the Federal Reserve's moves on interest rates increases.
The Fed has aggressively increased its benchmark policy rates over the past several quarters in a bid to bring inflation down to its 2 per cent range.
The Abu Dhabi-headquartered lender said its strong performance came amid a continued economic momentum in the Arab world’s second-largest economy.
The UAE's economy has bounced back sharply from the Covid-19-induced slowdown on the back of higher oil prices and measures to mitigate the impact of the pandemic.
After growing 7.9 per cent in 2022, the most in 11 years, according to official data, the country's economy is expected to expand 3.9 per cent this year and 4.3 per cent in 2024, as per the UAE Central Bank.
With economic momentum continuing this year and interest rates still on the rise, profitability of the four largest banks in the UAE is set to grow further this year, Moody's Investors Service said in March.
FAB said its net income for the first half of this year had risen to Dh8.1 billion.
On an underlying basis, excluding Magnati-related gains in the first half of last year, net profit was up 65 per cent year-on-year, FAB said in a statement.
The non-interest income contribution to group's revenue increased to 34 per cent, underlining continued strategic focus on revenue diversification, it said.
Assets at the end of June climbed to Dh245.86 billion from Dh228.36 billion at the end of 2022.
Loans and advances and Islamic financing rose 5 per cent year to date to Dh483 billion, and customer deposits for the reporting period rose to Dh745 billion, the lender said in the statement.
“FAB posted a very strong set of financial results, as evidenced by record underlying revenue and profits both in the second quarter and in the first half of 2023,” said Lars Kramer, group chief financial officer at FAB.
Improvements were recorded across all business lines “as a result of strong business volumes across our diversified franchise, underpinned by tailwinds from higher interest rates and continued focus on enhancing cross-sell”, he said.
“In the current high interest rate environment, we will continue to prudently manage risk, preserve a strong and resilient profile, and remain laser focused on enhancing group returns,” said Mr Kramer.
In June, FAB completed the merger of Bank Audi Egypt with its Egyptian operations, consolidating its market position in the most populous Arab country.
The lender is open to acquisition opportunities in the Middle East and North Africa and in markets beyond as long as the deals make commercial sense and create value for the bank.
FAB is also open to acquiring international banks if an opportunity presents itself, as it continues to expand its footprint in markets around the world, Ms Al Rostamani told The National in April.
Paltan
Producer: JP Films, Zee Studios
Director: JP Dutta
Cast: Jackie Shroff, Sonu Sood, Arjun Rampal, Siddhanth Kapoor, Luv Sinha and Harshvardhan Rane
Rating: 2/5
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Killing of Qassem Suleimani
Killing of Qassem Suleimani
The five pillars of Islam
1. Fasting
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The flights: Etihad, Emirates, British Airways and Virgin all fly from the UAE to London from Dh2,700 return, including taxes
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Harry Potter and the Cursed Child is on now at the Palace Theatre. Tickets need booking significantly in advance
Entrance to the Harry Potter exhibition at the House of MinaLima is free
The hotel: The grand, 1909-built Strand Palace Hotel is in a handy location near the Theatre District and several of the key Harry Potter filming and inspiration sites. The family rooms are spacious, with sofa beds that can accommodate children, and wooden shutters that keep out the light at night. Rooms cost from £170 (Dh808).
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
Match info
Manchester City 3 (Jesus 22', 50', Sterling 69')
Everton 1 (Calvert-Lewin 65')
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Chelsea 1
Alonso (62')
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Depoitre (50')
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Quarter-finals
Saturday (all times UAE)
England v Australia, 11.15am
New Zealand v Ireland, 2.15pm
Sunday
Wales v France, 11.15am
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Killing of Qassem Suleimani
Water waste
In the UAE’s arid climate, small shrubs, bushes and flower beds usually require about six litres of water per square metre, daily. That increases to 12 litres per square metre a day for small trees, and 300 litres for palm trees.
Horticulturists suggest the best time for watering is before 8am or after 6pm, when water won't be dried up by the sun.
A global report published by the Water Resources Institute in August, ranked the UAE 10th out of 164 nations where water supplies are most stretched.
The Emirates is the world’s third largest per capita water consumer after the US and Canada.
Safety 'top priority' for rival hyperloop company
The chief operating officer of Hyperloop Transportation Technologies, Andres de Leon, said his company's hyperloop technology is “ready” and safe.
He said the company prioritised safety throughout its development and, last year, Munich Re, one of the world's largest reinsurance companies, announced it was ready to insure their technology.
“Our levitation, propulsion, and vacuum technology have all been developed [...] over several decades and have been deployed and tested at full scale,” he said in a statement to The National.
“Only once the system has been certified and approved will it move people,” he said.
HyperloopTT has begun designing and engineering processes for its Abu Dhabi projects and hopes to break ground soon.
With no delivery date yet announced, Mr de Leon said timelines had to be considered carefully, as government approval, permits, and regulations could create necessary delays.
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