First Abu Dhabi Bank’s (Fab) first half group net profit hit AED5.4 billion ($1.47 billion), an 11% 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, a WAM report said.

 

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%. 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% compared to the first half of 2020, while the first-half operating income reached AED9.6 billion, up 2% year-on-year.

 

Impairment charges were at AED1.1 billion, down 36% year-on-year, reflecting improving economic conditions, and adequate provision buffers. Operating costs stand at AED2.8 billion, up 7% year-on-year reflecting ongoing investments in strategic and digital initiatives.

 

Also, total assets reached AED944 billion, up three% year-to-date, while customer deposits increased to AED575 billion, up 6% year-to-date and 1% sequentially.

 

Loans and advances stood at AED399 billion, up three% year-to-date and five% sequentially. Strong liquidity position with Liquidity Coverage Ratio (LCR) stands at 119%.

 

The NPL ratio was at 3.9%, with provision coverage at 97%, while Common Equity Tier 1 (CET1) at 13.0% 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: "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% in the second quarter and 51% 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% sequentially and 19% year-on-year, bringing the first-half net profit to AED5.4 billion.

 

He added: "This strong result was driven by 18% 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." -- TradeArabia News Service