Finance House net profit jumps 20pc
Abu Dhabi, February 11, 2013
Abu Dhabi-based Finance House has reported a consolidated net profit of Dh72.2 million ($19.6 million) for the year ended December 31, 2012, up 20.4 per cent over Dh60 million achieved the previous year.
The bank's total assets grew to Dh3.72 billion, registering a steady increase of 6 per cent over Dh3.51 billion the year before.
During the year, the Abu Dhabi bank's customer deposits grew by a robust 16.5 per cent to hit Dh1.8 billion compared to Dh1.55 billion as at the end of the previous year.
Impressed with the results, Finance House board has recommended a cash dividend of 20 per cent subject to regulatory approvals.
Commenting on results, chairman Mohammed Abdulla Alqubaisi said: “Despite challenging market conditions and a tighter regulatory framework, we are proud to maintain our profitable stance for the eighth successive year since inception. For a genuine private sector enterprise operating in the fiercely competitive UAE financial services sector, this is a creditable achievement indeed.”
“This is a remarkable achievement and bears testimony to the continued confidence that the market places in Finance House”, Alqubaisi added.
Net interest income from core business activities grew by 1.6 per cent to hit Dh122.2 million in 2012 compared to Dh120.3 million in 2011.
The Abu Dhabi lender said despite robust growth in loan book during the year, increase in net interest income was only marginal, mainly due to lower interest earned on inter-bank placements where interest rates remained subdued throughout 2012 in comparison to 2011.
The net fee and commission income from core business activities registered a healthy growth of over 21 per cent, increasing to Dh28.9 million in 2012 from Dh23.8 million a year ago.
Loans & Advances as of December 31, 2012 grew by 14 per cent to Dh1.38 billion compared to Dh1.21 billion at the end of the previous year. At the same time, Islamic financing and investing assets also registered a healthy growth of over 13.7 per cent to reach Dh78.3 million as at 31 December 2012.
“Our Loans to Deposits ratio as of December 31, 2012 stood at a healthy 80.8 per cent compared to 82.5 per cent in the previous year, reflecting both our cautious approach to loan book growth and the significant head room available for sustained loan book growth in 2013 and beyond,” noted Alqubaisi.
The Group’s bad debt provisioning policy continues to be conservative and as of 31 December 2012, it maintains loan loss coverage of 81 per cent (2011:74 per cent) by way of specific provisions to cover net exposure against individually impaired loans and loan balances that are past due for 91 days or more but are not impaired.
Commenting on its liquidity position, Alqubaisi said, "Finance House Group continues to manage its liquidity in a prudent manner. Since the onset of the financial crisis in October 2008, we have remained net lenders to the UAE inter-bank market and continue to maintain this position till date."
"Cash and cash equivalents as of December 31, 2012 stood at Dh599 million compared to Dh526 million as at the end of the previous year, representing a healthy 16 per cent of total assets," he added.
The shareholders’ equity improved to Dh651 million and the capital adequacy ratio stood at a robust 26.6 per cent, providing a solid footing for accelerated future growth.
On its future outlook, Alqubaisi said, “We look forward to 2013 with renewed optimism for sustained profitable growth, in line with improving economic conditions- locally and globally."
"Our strategy is sound and we have the necessary mechanisms and structures in place to exploit profitable opportunities, to adapt quickly to changing market conditions, to continue managing risks well and to maximize returns for our shareholders," he added.-TradeArabia News Service