Thursday 27, July 2017 by Georgina Enzer

FAB reports first half 2017 group net profit of AED 5.49 billion

First Abu Dhabi Bank (FAB), the UAE’s largest bank, and one of the world’s largest financial institutions, has reported consolidated pro-forma financial results for the first time post-merger, delivering a resilient performance amidst softer economic conditions.

First Half 2017 Group Net Profit improved four per cent year-on-year to AED 5.49 Billion, translating to annualised Earnings per Share of 97 fils. Solid revenues at AED 9.85 Billion and the realisation of substantial cost synergies post-merger, were key drivers behind this performance. Also, impairment charges were eight per cent lower year-on-year on the back of higher recoveries and an adequately provisioned portfolio. In the second quarter of 2017, the Group generated a net profit of AED 2.56 Billion down from AED 2.68 Billion in the same period in 2016, primarily reflecting slower business momentum year-on-year.

As of June-end 2017, FAB displays a strong liquidity profile with loans-to-deposit ratio of 85 per cent and Liquidity Coverage Ratio (LCR) well above the glide path as defined by Basel III norms. Capital position has strengthened year-on-year thanks to continued focus on risk optimisation. With a CET1 ratio of 14.4 per cent, the Group is well positioned to meet capital requirements as a Domestic Systemically Important Bank. Annualised returns for the first half of 2017 are solid with a Return on Tangible Equity (RoTE) at 14.7 per cent. 

“I am pleased with the progress and execution of our integration plan at this early stage in our transformation journey. The consolidation of our businesses and operations, and the ongoing realisation of synergies are strong testaments to the benefits of this merger as we continue to create value for customers, employees, shareholders and communities, and empower them to grow stronger through differentiation, agility and innovation,” said Abdulhamid Saeed, Group Chief Executive Officer of FAB.

“FAB’s performance in the first half of 2017 demonstrates the Group’s resilience during a period marked by softer economic conditions. With Group net profit increasing 4 per cent to AED 5.49 Billion and solid revenue of AED 9.85 Billion, we ended the period with a strong balance sheet, an industry leading cost-to-income ratio, as well as a robust liquidity profile and capital position - meaning we are well-placed to meet the evolving regulatory landscape. As a strong testament to our achievements as a financial services leader in the UAE and the broader region, FAB secured prestigious industry awards during the quarter... Looking ahead, we are continuing to create a stronger and efficient financial institution, and remain firmly focused on building sturdy foundations to drive long-term sustainable growth and maximise value for our shareholders.”

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