NBF profit up 15.3% as costs controlled

Results reflect solid core business growth and proactive asset and liability management

National Bank of Fujairah (NBF) yesterday reported a net profit of Dh145.4 million for the first quarter of 2018, up15.3 per cent compared to Dh126.1 million in the corresponding period of 2017.

The bank’s operating profit was Dh248.0 million for the three-month period compared with Dh212.0 million in the same quarter in 2017; a rise of 17 per cent. Operating income at Dh369.2 million saw a growth of 13.7 per cent compared to the corresponding period last year.

While the bank’s core incomes improved during the period, enhanced balance sheet management in a rising interest rate environment, efficient management of liquidity and effective pricing strategies helped NBF to improve margins and return on capital.

“The bank’s positive start to 2018 continues to reaffirm the efficacy of our long-term partnership with customers, strategies and our solid financial position. Most importantly, NBF was able to deliver a good set of results that were not just a year-on-year increase, but a vast improvement to that seen at the end of December 2017,” said Eisa Saleh Al Gurg, Deputy Chairman of NBF.

Net interest income and net income from Islamic financing and investment activities for the first quarter of 2018 grew by 17.8 per cent to Dh244.3 million compared to 2017. Foreign exchange and derivatives income experienced a remarkable growth of 43.6 per cent at Dh36.3 million for the first quarter of 2018 compared with Dh25.2 million in the same period in 2017.

Operating expenses increased by 7.6 per cent, reflecting NBF’s disciplined cost management, prudent investments in businesses, systems and infrastructure, including a set of digital initiatives to enhance our future offerings and customer service. Cost-to-income ratio stood at 32.8 per cent compared to 34.7 per cent in the corresponding period of 2017.

Net impairment losses for the period was at Dh102.6 million compared to Dh85.9 million in 2017. The NPL ratio was 5.5 per cent compared to 5.53 per cent at the year-end 2017. Total provision coverage ratio (including credit risk reserve) improved to 96.2 per cent from 89.5 per cent as at 31 December 2017.

Loans and advances and Islamic financing receivables rose 4.8 per cent from Dh24.1 billion at 2017 year-end to Dh25.2 billion, and up by 8.7 per cent year on year.

Customer deposits and Islamic customer deposits stood at Dh27.79 billion compared to Dh27.86 billion at 2017 year-end, and up by 4.8 per cent year on year.

Rise in operating income to Dh369.2m