FAB Reports Record Half Year 2019 Net Profit of Dh6.3 Billion

First Abu Dhabi Bank (FAB), the UAE’s largest bank and one of the world’s largest and safest financial institutions, reported its financial results today for the first half ended 30 June 2019.

Delivering a solid financial performance in the first half of 2019

• Record half year net profit of AED 6.3 Billion, up 4% year-on-year, driven by revenue growth, coupled with continued cost control and prudent risk management
• Second quarter net profit of AED 3.2 Billion, up 4% sequentially and 5% year-on-year
• Annualised Earnings per Share (EPS) at AED1.12, compared to AED 1.08 in the first half of 2018
• Half year Group Revenue up 3% year-on-year, crosses the AED 10 Billion mark
• Operating costs broadly flat year-on-year despite increased investments in digital and strategic initiatives;   cost-to-income ratio (ex-integration costs) of 26.1% remains at industry-leading level
• Healthy asset quality with Non-Performing Loan ratio at 3.1% and provision coverage of 111%

Business momentum continues, underpinned by a strong liquidity position, robust capitalisation

• Loans and advances at AED 366 Billion, up 6% year-on-year
• Customer deposits at AED 462 Billion, up 7% year-on-year
• Strong liquidity position with June-end 2019 Liquidity Coverage Ratio (LCR) at 137%, and over AED 12 Billion of term funding raised in the first half of 2019 at a competitive pricing
• Strong capital generation with Basel III Common Equity Tier-1 (CET1) ratio of 13.6%

Commenting on the bank’s performance, Abdulhamid Saeed, Group Chief Executive Officer of FAB, said:

 “I am pleased to report that FAB delivered a record financial performance in the first six months of 2019, as it continues to unlock its full potential as a leading banking franchise. Despite challenging market conditions, the Group achieved year-on year growth in assets, revenue and net profit, while maintaining a strong balance sheet and showing improved asset quality, liquidity and capital ratios. Our risk-adjusted returns have also improved, in line with our commitment to enhance profitability across core businesses and targeted markets. The recent reaffirmation of our AA- credit rating by Standard and Poor’s is a strong testament of FAB’s robust credit profile and competitive strengths.”

“During the first half of the year, we have made significant progress in delivering against our strategic goals. We have reviewed our operations and offerings at a group level, in line with our commitment to place our customers at the heart of all that we do, and have developed new solutions aimed at providing greater convenience and an enhanced experience for both our retail customers and our corporate and investment banking clients. We also continued to be a key partner for the Abu Dhabi government in various avenues from Payments to SME financing. FAB will continue to drive economic growth and diversification in the communities in which we operate, leveraging on our market-leading capabilities to support our stakeholders to grow stronger.”

 “Looking ahead and despite a softer global outlook, we are confident in our ability to continue to leverage our leading franchise, diversified business model, and strong execution capabilities to deliver sustainable growth and maximise shareholder returns.”

Foreign Ownership Limit

In light of the ever-changing global economic landscape, and the benefits of foreign capital flows to support prosperous economies, such as the United Arab Emirates, FAB’s Board of Directors discussed the bank’s Foreign Ownership Limit in their meeting today.

As part of efforts to support the UAE in attracting capital, foreign investments and in promoting economic growth, the board has proposed to remove FAB’s foreign ownership limit cap, with the potential that other public companies in the UAE may apply similar measures. This will support the country’s leadership in positioning the UAE amongst one of the most attractive economies for foreign direct investments.

The changes proposed would be subject to the supervision of regulatory authorities and would require amendments to the current laws and policies.