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FAB reports Group Net Profit of AED5.4 billion in H1 2021

July 29, 2021
banking

ABU DHABI, 28th July, 2021 (WAM) -- 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 AED5.4 billion, an 11 percent increase 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 percent. 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 percent compared to the first half of 2020, while the first-half operating income reached AED9.6 billion, up 2 percent year-on-year.

Impairment charges were at AED1.1 billion, down 36 percent year-on-year, reflecting improving economic conditions, and adequate provision buffers. Operating costs stand at AED2.8 billion, up seven percent year-on-year reflecting ongoing investments in strategic and digital initiatives.

Also, total assets reached AED944 billion, up three percent year-to-date, while customer deposits increased to AED575 billion, up 6 percent year-to-date and one percent sequentially.

Loans and advances stood at AED399 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 percent, with provision coverage at 97 percent, while Common Equity Tier 1 (CET1) at 13.0 percent 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.'

'Our international franchise remains one of our key competitive differentiators, enabling us to offer enhanced connectivity to our clients and to capture growing trade and investment flows. During the period, we have made excellent progress in our strategy to gain market share and increase penetration in targeted markets in our core region. Revenue from MENA grew 67 percent in the second quarter and 51 percent in the half-year, led by Saudi Arabia and Egypt, and now represent almost half of revenues generated from our international operations,' she said.

James Burdett, Group Chief Financial Officer, stated that the Group recorded a net profit of AED2.9 billion in the second quarter of 2021, up 16 percent sequentially and 19 percent year-on-year, bringing the first-half net profit to AED5.4 billion.

He added, 'This strong result was driven by 18 percent revenue growth sequentially, led by a very strong performance in CIB from our investment banking businesses, sustained results in Personal Banking, and higher contribution from our international operations following Bank Audi Egypt acquisition.

'Impairment charges were lower year-on-year on the back of a significantly improved backdrop compared to the economic conditions at the height of the pandemic during the first half of 2020, founded on a high-quality asset portfolio underpinned by prudent risk management.'

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