UAE Lender FGB Q1 Net Profit Rises 27%, Beats Estimates

The lender made a net profit of Dhs1.33 billion ($362.1 million) in the three months ending March 31.

First Gulf Bank (FGB), the second-largest lender by market value in the United Arab Emirates, posted a 27 per cent jump in first-quarter net profit on Wednesday, becoming the latest UAE bank to post strong quarterly profit growth.

FGB, majority-owned by Abu Dhabi’s ruling family, made a net profit of Dhs1.33 billion ($362.1 million) in the three months to March 31, up from Dhs1.05 billion in the prior-year period, it said in a statement.

Analysts polled by Reuters on average had forecast FGB would make a quarterly profit of Dhs1.23 billion.

UAE banks in general have recorded impressive growth in the first quarter, continuing the trend from 2013, as the local economy rebounds from a real estate crash and debt problems at Dubai government-linked entities.

Abu Dhabi Commercial Bank and Abu Dhabi Islamic Bank posted year-on-year profit increases of 15 and 20 per cent respectively earlier this week.

Smaller lenders have also benefited: on Wednesday, United Arab Bank, National Bank of Fujairah and National Bank of Umm al-Qaiwain posted increases of 34, 27 and 9 per cent.

FGB’s increase in net profit was aided by a 17 per cent increase in net interest and Islamic financing income, and a 27 per cent leap in non-interest income year-on-year.

The latter was a reflection of the bank’s strategy to strengthen its wholesale and investment banking businesses, chief executive Andre Sayegh said in the statement.

FGB expects to achieve net profit growth in the low double digits in 2014, Sayegh said in February.

Despite the improving economic picture, FGB’s impairment allowances for the three months to March 31 were almost flat against the same quarter last year at 436 million dirhams.

Loans and advances rose seven per cent to stand at Dhs123.4 billion at the end of March. Deposits grew nine per cent over the same time frame to Dhs119.2 billion.

Last month, the bank priced its debut bond denominated in Australian dollars, a A$250 million five-year issue, while it also set up a sukuk programme in Malaysia.