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Dubai’s NBF posts 87% dip in net profit for first nine months of 2020

Dubai’s NBF posts 87% dip in net profit for first nine months of 2020

Its operating profit of Dhs707.3m for Q1-Q3 2020 plummeted from Dhs862.3m during the same period last year

Dubai’s National Bank of Fujairah (NBF) posted a net profit of Dhs66.3m for the nine month period ended September 30, 2020, down 87 per cent compared to Dhs511.6m from the corresponding period of 2019 after absorbing substantial increase in provisions.

Its operating profit of Dhs707.3m for Q1-Q3 2020, plummeted from Dhs862.3m during the same period last year.

Meanwhile, the lender posted operating income of Dhs1.1bn, down 17.1 per cent compared to Dhs1.3bn from a year-earlier period, reflecting the difficult operating environment.

Declining interest rates, sluggish economic activity and contraction in the loan book impacted the operating performance of the bank, a statement said.

Net interest income and net income from Islamic financing and investment activities and net fees, commission and other income stood at Dhs722.1m and Dhs222.3m respectively compared to Dhs859.4m and Dhs300.7m in the corresponding period of 2019.

However, foreign exchange and derivatives income reached Dhs99.1m compared to Dhs112.5m during Q1-Q3 2019.

Operating expenses reduced by 15.3 per cent to Dhs354.8m compared to Dhs418.6m in the corresponding period of 2019, reflecting the measures adopted in line with the changing market demands and the significant move towards the use of digital solutions.

The cost-to-income ratio stood at 33.4 per cent compared to 32.7 per cent in the corresponding period of 2019 reflecting the lower operating income.

Loans and advances and Islamic financing receivables stood at Dhs25.4bn compared to Dhs27.1b at 2019 year-end and Dhs27.6bn as of September 30, 2019.

Meanwhile, return on average assets was 0.2 per cent, compared to 1.7 per cent for the corresponding period in 2019. However, return on average equity was 1.4 per cent, compared to 12.8 per cent for the corresponding period in 2019.

Dr Raja Al Gurg, deputy chairman, said: “All the way through the exceptionally challenging 2020 with all the volatility and uncertainty that the Covid-19 pandemic has brought and the on-going geopolitical tensions, rising cost of risk and continued headwinds of lower oil prices and interest rates, NBF has maintained its resolute focus on the execution of its strategic priorities of delivering exceptional customer service, spearheading digital innovation, maintaining financial stability, continuing to meet compliance and regulatory standards and supporting communities.”

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