FAB reports 19.3% dip in net profit for Q3 2020

UAE-based lender First Abu Dhabi Bank (FAB) reported Dhs2.5bn in net profit for Q3 2020, 19.3 per cent down from Dhs3.1bn during the third quarter of last year, and 4 per cent up from the previous quarter.

Net profit for the first nine months of 2020 stands at Dhs7.3bn, 23 per cent lower compared to the same period in 2019, during which it recorded Dhs9.5bn. The dip was mainly due to higher impairment charges and softer revenue, partly mitigated by cost optimisation.

Meanwhile, revenues for Q3 2020 valued in at Dhs4.3bn, down 14 per cent from Dhs5bn from a year-earlier period. Revenues for the first nine months, however, totaled Dhs13.7bn, down 9.8 per cent from Dhs15.1bn earned during the first nine months of 2019.

Total assets as at September 30, 2020, totalled Dhs955bn.

“FAB delivered a resilient performance in the first nine months of 2020, successfully managing key risks in the face of unprecedented economic and market conditions,” said André Sayegh, group chief executive officer, First Abu Dhabi Bank.

“With total assets almost reaching the Dhs 1 trillion mark as of September-end 2020, our robust foundation enabled us to continue to support our clients, and to benefit from the gradual rebound in economic activity and market sentiment. Leveraging our competitive strengths, we were proud to lead prominent transactions for our clients in the third quarter, and to continue to support trade and investment flows across the region.”

James Burdett, group chief financial officer, FAB, said: “The group delivered a net profit of Dhs2.5bn in the third quarter of 2020, up 4 per cent sequentially, marking our strongest quarterly performance this year. While we continued to face headwinds from low interest rates and the challenging environment brought about by the ongoing pandemic, this was offset by higher fee-based income reflecting a rebound in business activity with sales volumes in PBG returning to pre-Covid levels, and strong results from our continued focus on cross-sell and revenue diversification.

“Our CIB business performed particularly well with underlying revenue growth underpinned by the execution of landmark deals for our core clients in the UAE and MENA, as well as strong client engagement across our franchise driving higher income from global market sales. Reflecting strong cost discipline, operating expenses improved 7 per cent year-on-year amidst ongoing investments in key strategic and digital initiatives designed to enhance productivity and create future efficiencies. While we continued to build prudent provisions against our portfolio, we benefitted from the partial resolution of a large corporate account which resulted in lower impairment charges sequentially. With a CET1 ratio at 14.0 per cent, our capital position is strong and comfortably above regulatory requirements.”