National Bank of Fujairah reports 15% rise in quarterly profit

National Bank of Fujairah, which counts the emirate’s government and Dubai’s sovereign wealth fund as shareholders, reported a 15 per cent rise in second-quarter net profit as income from core operations improved and impairments for bad loans fell.

Net profit for the three months ending June 30 climbed to Dh189.45 million, the lender said in a statement to Abu Dhabi Securities Exchange, where its shares are traded.

Income from Islamic financing, investments and interest climbed to Dh487.4m, up from Dh434.5m recorded for the second quarter of 2018. Net impairment losses declined to Dh924m for the reporting period, a 13.7 per cent year-on-year drop, it added.

The bank said its net profit for the first six months of 2019 rose to a record Dh357.1m, up 15.1 per cent over the corresponding period last year.

The lender also recorded its best half-year operating profit of Dh567m, a 9.1 per cent yearon-year rise, driven by steady business growth, it said.

The bank delivered record half-year results “in the face of low economic activity”, said Easa Saleh Al Gurg, NBF deputy chairman. “It is encouraging that NBF is able to maintain its growth momentum.”

NBF said it maintained the net impairment provisions of Dh209.9m for the six-month period.

Its total provision coverage ratio improved to 108.6 per cent from 102 per cent at the end of last year and its nonperforming loans ratio improved to 4.8 per cent compared to 5.1 at the end of December 2018.

Loans, advances and Islamic financing receivables rose to Dh27.9 billion at the end of June, up 7.2 per cent from the corresponding period in 2018. “The growth compares well relative to the marginal increase in credit growth at the industry level, reported in May 2019 in the UAE Central Bank’s statistics report,” it said.

Assets reached Dh42.5bn, an 11.7 per cent year-on-year rise, it added.

The bank in March said it received shareholders’ approval to increase the ceiling of its Tier 1 capital to $636.1m (Dh2.33bn). Tier 1 capital consists of shareholders’ equity and retained earnings and is used to measure a bank’s financial health.

The lender is looking to raise $350m from the capital markets this year through a Tier 1 issue, Vince Cook, chief executive of NBF told The National earlier that month.

The bank, which has already converted an earlier Tier 1 capital bond into equity and paid a Tier 2 tranche in November, is awaiting the right time to place the issue in the market, he said.

The lender also recorded its best halfyear operating profit of Dh567m, a 9.1 per cent year-on-year rise