FAB quarterly profit rises 54% behind investment gains
First Abu Dhabi Bank, the UAE’s largest lender by assets, reported a 54 per cent jump in third-quarter profit on the back of higher net interest income and gains on investments as the UAE continues to recover from the Covid-19 pandemic.
Total net profit attributable to shareholders for the threemonth period to the end of September, climbed to Dh3.9 billion ($1.06bn), the lender said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
The total profit beat analyst estimates of Dh2.55bn, according to analysts polled by Bloomberg and a projected Dh2.6bn forecast from analysts on Eikon Refinitiv data.
Net interest income during the period rose 10 per cent to Dh3.14bn, while the gain on investment and derivatives surged to Dh2.01bn from Dh391.4 million in the same period last year.
“Our robust pipeline translated to increased business activity and deal execution,” said Hana Al Rostamani, FAB group chief executive.
“Areas of strategic focus are progressing well, as we continue to build specialised capabilities within our core businesses to support future growth, while accelerating transformation. New product propositions are being introduced in key areas.
“We also continue to make progress against our international strategy. The integration of our operations in Egypt is on track to be completed during 2022 and we have recently received regulatory approval to establish our first branch in Shanghai, which will further expand [our presence] in Asia.
“With the UAE at the forefront of the post-pandemic recovery and as we enter the final quarter of 2021, I am optimistic about the opportunities that lie ahead.”
The UAE’s economy is expected to grow 3.1 per cent in 2021, according to the International Monetary Fund. That is higher than the UAE Central Bank’s growth estimates of 2.1 per cent this year and 4.2 per cent in 2022. FAB expects the UAE’s economy to grow 2.4 per cent in 2021 and 3.8 per cent in 2022, driven by Expo 2020 and higher oil prices, it said.
The economy has rebounded thanks to a rapid vaccine introduction and the easing of travel restrictions, with Dubai one of the first cities globally to re-open its markets and businesses in July 2020, while ensuring
The UAE’s banking assets could grow by between 8% and 10% next year as the economy recovers
strict compliance with health and safety measures.
The UAE also has one of the world’s highest per capita Covid-19 vaccination rates. Cases in the country have dropped to below 100 and the Emirates is ranked third in the world in a league table looking at how well countries are controlling the coronavirus, while reopening their economies. The UAE trails only Ireland and Spain in the Bloomberg Covid Resilience Ranking, published monthly.
The UAE’s banking assets could grow 8 per cent to 10 per cent next year as the economy recovers from the pandemic, according to Abdulaziz Al Ghurair, chairman of the UAE Banks Federation.
Local lenders have benefitted from the Dh400bn monetary and fiscal support by the UAE government, including the central bank’s relief package of more than Dh250bn to local lenders to help soften the blow of the pandemic.