First Abu Dhabi Bank reports net profit of Dhs8bn in H1 2022

First Abu Dhabi Bank (FAB) announced that the group’s net profit amounted to Dhs8bn in H1 2022, an increase of 50 per cent compared to the same period last year.

The bank said that the total income was Dhs12.5bn, up 31 per cent year-on-year (YoY), including a Dhs3.1bn net gain on the sale of a majority stake in Magnati.

Hana Al Rostamani, group CEO of FAB, said the bank delivered a strong performance in the first six months of 2022 with “a 50 per cent increase in net profit compared to the same period in 2021. Despite heightened global market volatility, our core businesses maintained solid growth momentum reflecting healthy pipeline execution across our diversified franchise and our ongoing strategic focus on deepening client relationships”.

She added: “Almost Dhs50bn net incremental lending was extended by FAB year-to-date (YTD), a record for the group for any half-year period. This demonstrates buoyant regional activity, FAB’s leading origination capabilities, and the fundamental strength of our balance sheet as we continued to deploy our resources and expertise to support our client franchise with their local and cross-border banking needs.”

James Burdett, FAB’s group CFO, said, “FAB produced another solid set of results in the second quarter with a net profit of Dhs2.9bn, up 13 per cent sequentially on an underlying basis, bringing first half 2022 profit to Dhs8bn. The annualised return on tangible equity for the first half of 2022 improved to 19.5 per cent from 13.6 per cent in H1 2021.

“In the last quarter, all our core businesses delivered top-line growth sequentially, led by double-digit growth in Investment Banking and Corporate and Commercial Banking, which is a strong result in adverse global market conditions. This was helped by strong volumes, early benefits from rising interest rates, and healthy client activity in global markets consistent with our strategy to enhance cross-sell. The risk was prudently managed across the group, while the year-on-year (YoY) growth in operating expenses reflects continued investments in franchise growth and transformation.”

The bank said the impairment charges (net) amounted to Dhs1bn, 9 per cent lower compared to last year. However, the annualised cost of risk reached 47 basis points.

The operating costs reached Dhs3.1bn, up 8 per cent YoY excluding Bank Audi Egypt inclusion, which reflects ongoing investments to drive growth and transformation.

The loans, advances and Islamic financing amounted to Dhs459bn, up 6 per cent sequentially and 12 per cent YTD. The customer deposits reached Dhs648bn, up 8 per cent sequentially and 5 per cent YTD, while CASA (current account savings account) balances stood at Dhs291bn, up 15 per cent compared to 2021.

The liquidity coverage ratio (LCR) amounted to 135 per cent, which underlines the strong liquidity position; however, the healthy asset quality metrics with NPL (non-performing loans) ratio and provision coverage reached 3.6 per cent and 100 per cent, respectively.

The common equity tier 1 (CET1) was at 12.6 per cent, comfortably above regulatory requirements.