National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB), which merged on April 1 to create one of the largest banks in the Middle East and Africa, posted on Wednesday a 12.4 per cent rise in combined “pro-forma” first quarter net profit.
Pro-forma net profit reached Dhs2.93bn ($797.80m) in the three months to March 31, they said in a statement, up from Dhs2.6bn in the year earlier period.
Analysts only provided forecasts for the two separate lenders – Dhs1.31bn for NBAD and Dhs1.41bn for FGB, according to the average estimates of three analysts polled by Reuters.
The combined bank plans to adopt its new name, First Abu Dhabi Bank, after shareholders approve the change at its general assembly meeting on April 24, it said.
The pro-forma results were boosted by a 145.5 per cent rise in “other non-interest” income to Dhs1.2bn from the year earlier period. That helped offset a 4.9 per cent slip in net interest and Islamic financing income to Dhs3.21bn, as well as a 14.7 per cent slide in net fees and commissions to Dhs799m.
Operating expenses for the bank rose by 5.7 per cent to Dhs1.53bn, while impairment charges dipped 3.9 per cent to Dhs645m.
Announced in June last year, the merger is expected to produce cost savings of Dhs500m.
The newly-merged bank made up to 20 job cuts in its global markets division, sources told Reuters this month.
It was the second bank to report earnings on Wednesday after Emirates NBD, Dubai’s largest lender, which reported a 4 per cent rise in first-quarter net profit to Dhs1.87bn.