Sunday 16, July 2017 by Nabilah Annuar

NBF’s Q2 2017 net profit bounces back 24.4 per cent

Solid core business and robust asset and liability management continue to underpin strong performance by the bank.

National Bank of Fujairah PJSC (NBF) has announced its results for the six month period ended 30 June 2017. NBF posted a net profit of AED 154.9 million in the second quarter of 2017, a rise of 24.4 per cent over the corresponding quarter of 2016, which reflects an improvement in the impairment provisions during the current quarter and a high level of resilience in its core business. On the back of a strong Q2 2017 performance, NBF reported a net profit of AED 281.0 million for the half year ended 30 June 2017 up 2.2 per cent over the corresponding period of 2016.

Commenting on the results, HE Sir Easa Saleh Al Gurg, KCVO, CBE Deputy Chairman said, NBF continues to make good progress in its principal areas of focus. The bank was honoured once again with more awards and endorsements this quarter underscoring NBF’s long-standing culture of service excellence, client partnership and being the employer of choice. We are particularly delighted as the bank was ranked 4th in the GCC and the highest in the UAE at Mediaquest’s Top CEO Awards. Also, NBF retained the Best Corporate Bank UAE and Best Commercial Bank UAE at the Banker Middle East Industry Awards together with the MENA HR Excellence Team of the Year awards.”

Operating income for the quarter experienced a growth of 7.3 per cent and for the half year a growth of 1.8 per cent compared to the corresponding periods of 2016. Net interest income and net income from Islamic financing and investment activities grew by 4.4 per cent and income from investments and Islamic instruments saw a growth of 113.0 per cent compared to the corresponding period of 2016.

Loans and advances and Islamic financing receivables rose 4.8 per cent from AED 22.8 billion at 2016 year end to AED 23.9 billion, and up by 13.2 per cent from 30 June 2016.

Customer deposits and Islamic customer deposits declined by 2.5 per cent from AED 25.9 billion at 2016 year end to AED 25.3 billion but went up by 11.8 per cent from 30 June 2016.

Shareholders’ equity of AED 4.7 billion exceeded the 2016 year end level by 3.4 per cent, an increase of 6.6 per cent from 30 June 2016.

Strong capital adequacy and liquidity levels were maintained, well ahead of Central Bank’s minimum requirements. Capital adequacy ratio was 17.9 per cent, lending to stable resources ratio stood at 90.3 per cent and eligible liquid assets ratio (ELAR) remains as one of the highest at the industry level at 18.8 per cent. ELAR industry average stood at 16.2 per cent for the year-end, based on regulatory statistics.

Operating expenses increased marginally by 1.3 per cent, reflecting NBF’s disciplined cost management, prudent investments in our businesses, systems and infrastructure, including a set of digital initiatives to enhance our offerings and customer service. Cost-to-income ratio stood at 34.6 per cent compared to 34.8 per cent in the corresponding period of 2016.

NBF continued with its prudent and transparent approach towards proactively recognising and providing for problem accounts. Net impairment charge was AED 157.6 million compared to AED 154.7 million in the corresponding period of 2016. The NPL ratio was 5.23 per cent compared to 4.95 per cent as at 31 December 2016. Total provision coverage ratio was 92.5 per cent compared to 101.3 per cent as at 31 December 2016. Total provision coverage including collaterals improved to 104.6 per cent.

Return on average assets was 1.6 per cent (31 December 2016: 1.4 per cent) and return on average equity was 12.1 per cent (31 December 2016: 10.4 per cent).

NBF’s rating was re-affirmed at BBB+ / A-2 by Standard & Poor’s, with a stable outlook, highlighting the bank’s underlying strength, prudent risk management and resilience.

“NBF’s strong Q2 results are a reflection of the bank’s underlying resilience and proactive approach to a challenging operating environment. It is good to see our commitment to the long-term sustainability of both our business model and our customer relationships have served us well during this period. Effective risk management, good governance and proactive business management are essential elements for ongoing success, and we remain committed to creating exceptional value for our customers and shareholders,” affirmed Al Gurg.

 

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