FAB registers record net profit of Dhs5.4 billion in first half of 2021
The lender recorded a net profit of Dhs2.9 billion in the second quarter of 2021; Abu Dhabi Islamic Bank posted an 89% surge in H1 2021 net profit to Dhs1.1 billion
First Abu Dhabi Bank (FAB) has reported its financial results for the first half period ended 30th June 2021. First half 2021 Group net profit was Dhs5.4 billion, an 11 per cent increase year-on-year.
The Group recorded a net profit of Dhs2.9 billion in the second quarter of 2021, up 16 per cent sequentially and 19 per cent year-on-year.
The increase was driven by revenue growth from a solid performance across the bank’s core businesses despite headwinds from rate cuts, increased contribution from international operations following the recent acquisition in Egypt, and lower impairment charges.
Cost discipline was maintained amid ongoing investments in strategic and digital initiatives with cost-to-income ratio (ex-integration costs) at an industry-leading level of 28.3 per cent. Growth in lending and investments during the period demonstrate effective balance sheet deployment to enhance returns, while the Group’s foundation remains robust across liquidity, capital and asset quality.
The annualised Earnings Per Share (EPS) stand at 96 fils, up 14 per cent compared to the first half of 2020, while the first-half operating income reached Dhs9.6 billion, up 2 per cent year-on-year.
Impairment charges were at Dhs1.1 billion, down 36 per cent year-on-year, reflecting improving economic conditions, and adequate provision buffers. Operating costs stand at Dhs2.8 billion, up seven percent year-on-year reflecting ongoing investments in strategic and digital initiatives.
Also, total assets reached Dhs944 billion, up three percent year-to-date, while customer deposits increased to Dhs575 billion, up 6 percent year-to-date and one percent sequentially.
Loans and advances stood at Dhs399 billion, up three percent year-to-date and five percent sequentially. Strong liquidity position with Liquidity Coverage Ratio ( LCR) stands at 119 percent.
The NPL ratio was at 3.9 per cent, with provision coverage at 97 per cent, while Common Equity Tier 1 (CET1) at 13.0 per cent is comfortably above regulatory requirements.
Hana Al Rostamani, Group Chief Executive Officer, said that the financial results “are a testament to the successful execution of our strategic priorities, and our tenacious ability to drive our competitive position while capitalising on the opportunities presented by an improved backdrop.”
She added that “Demonstrating the unique strength of our diversified franchise, we’ve achieved solid growth across our core businesses. In Corporate & Investment Banking (CIB), we continued to support and partner with our clients in navigating the gradual economic recovery and focused on driving specialisation in key areas, particularly investment banking, leading to a double-digit growth in revenue.”
James Burdet, Group Chief Financial Officer, stated that the Group recorded a net profit of Dhs2.9 billion in the second quarter of 2021, up 16 per cent sequentially and 19 per cent year-on-year, bringing the first-half net profit to Dhs5.4 billion.”
ADIB POSTS STRONG RESULTS: Abu Dhabi Islamic Bank ( ADIB) delivered strong financial results for H1 2021, with net profit surging 89 percent year-on-year to Dhs1.1 billion from Dhs588 million in H1 2020. The growth in net profit reflects the strong underlying performance across the business supported by a 3.4 per cent growth in total revenue to Dhs2.6 billion compared to Dhs2.5 billion in the same period last year. Growth in revenue was driven by an increase in non-funding income of 19 percent, boosted by a 11 percent improvement in fee income.
ADIB continued to demonstrate strengths and depths in its balance sheet with a 5 per cent year-on-year increase in total assets, driven by a 7 per cent growth in deposits and a 3 per cent growth in gross customer financing compared to H1 2020.
Chairman of ADIB Jawaan Awaidha Suhail
Al Khaili said:’’ “We are really encouraged by our financial results in the first half of 2021 as we continue to deliver strong operational performance across all business lines. Despite continued challenging market conditions, ADIB delivered robust year-on-year growth underscored by positive increases on our assets, revenues, and net profits while also maintaining a strong balance sheet, liquidity, and capital ratios. Our return on shareholders’ equity have also improved to 14 percent, in line with our commitment to enhance our profitability and deliver superior value to our shareholders.’’
“Our investments in key strategic and digital initiatives enabled us to enhance customer experience, support business productivity, and position the bank for future growth. We have seen an increase in key digital metrics with more and more customers benefiting from our enhanced digital banking features,’’ he added.
“We are focused on the priorities we outlined as part of our 5-year strategic review. We are now embarking on a new journey with a renewed purpose and a revamped vision. We are aiming to develop and launch new banking products and services that will allow us to support customers in all important financial stages in their lives while atracting new segments where we can grow profitably building on our strong brand and market position.”