First Gulf Bank (FGB), one of the leading UAE financial institutions, said its annual net profit for 2008 jumped 50 per cent to Dh3.5 billion ($952 million) when compared to the corresponding period in 2007.

Announcing the results at the board of directors meeting, Abdulhamid Saeed, managing director of FGB, said the total revenue of the overall core banking activities increased by 71 per cent during the year from Dh2.21 billion to Dh3.78 billion.

This was mainly driven by a 94 per cent increase in the net interest and Islamic Financing income which soared from Dh1.33 billion in 2007 to Dh2.58 billion in 2008.

Saeed said,' At a time when the world is heavily impacted by the financial turmoil resulting in credit and financial crisis, FGB has once again recorded strong performance and exceeded expectations.'

'This reconfirms the bank’s position as one of the best performing, most efficient and most profitable institutions. FGB has strong foundations to continue delivering its vision and commitment to shareholders,' he remarked.

Taking into consideration 2008 performance and the future growth potential, FGB’s board has recommended the distribution of 35 per cent of its capital as cash dividend subject to approvals from Central Bank and Shareholders’ Annual General Meeting.

'Despite the unprecedented difficult times the world has seen in the fourth quarter, our business model has proved to be impressively successful,' he noted.

'In the fourth quarter of 2008, the bank recorded a net profit of Dh671 million, that is 8 per cent higher than the Dh621 million generated in 2007,” he explained.

'The forward looking vision of our board of directors, combined with the strength and expertise of the bank’s management and staff, has positioned FGB to successfully navigate through this difficult economic cycle,' he added.

André Sayegh, FGB’s CEO said the bank's priority was to maintain a strong balance sheet, optimise profit for the shareholders, at the same time deliver exceptional service to its customers.

'Throughout the year, FGB has maintained a healthy and strong balance sheet where bank’s assets grew by 47 per cent to reach Dh107.9 billion by the end of 2008 and equity increased by 64 per cent to reach Dh16.6 billion.

In a timely step, the bank announced in July 2008 the issuance of mandatory convertible bonds worth Dh3.6 billion to UAE institutional strategic partners.

'It is all about doing the right thing at the right time. The issuance of the convertible bonds came at a time just before the liquidity crunch in the region,' he quipped.

'The bank now enjoys adequate capitalization with Capital Adequacy Ratio at 14 per cent which has put us at comfortable position when compared to the international standards,” Sayegh added.

In line with its consistent and well thought strategy of income diversification, 70 per cent of FGB Group’s net profit was generated by the core banking businesses - corporate, retail and treasury.

The remaining 30 per cent was generated by the two subsidiaries - Mismak and First Merchant International - and the three associate companies Green Emirates Properties, Aseel Islamic Finance and First Gulf Financial Services. The bank has maintained the same ratio for the third year in a row.

“Our core banking operations continue to perform strongly, which further underlines the bank’s status as a very dynamic institution with a solid revenue generating power,” Sayegh added.

Income from fee, commission, foreign exchange, derivatives and investment banking has increased by 37 per cent from Dh879 million to Dh1.20 billion.

The revenue from subsidiaries and associate companies has also seen an 48 per cent jump from Dh6.16 billion to Dh9.1 billion. These strong income growth indicators were the result of an increase of the fu