First Gulf Bank Q4 net profit up 13pc
ABU DHABI, January 28, 2015
First Gulf Bank, the third-largest lender in the UAE by assets, beat analysts estimates on Wednesday after posting a 13 per cent rise in fourth-quarter net profit.
It was helped by setting aside significantly less cash for bad loans.
The last major bank in the UAE to report earnings, it posted the largest profit figure of any bank in a reporting period marked by strong growth on the back of buoyant local economic conditions.
FGB made a net profit of Dh1.55 billion ($422 million) for the three months ending December 31, compared with Dh1.37 billion in the same period a year ago, it said in a statement.
Four analysts polled by Reuters earlier this month forecast an average net profit of Dh1.37 billion. The profit growth was driven by a 68 per cent year on year decline in provisioning to Dh177 million.
Having needed to put aside significant amounts of cash at the beginning of the decade to cover the aftermath of a local real estate bubble bursting and debt issues at Dubai state-owned companies, a rebounding local economy has improved asset quality to the benefit of all UAE banks.
The big slump in impairments helped offset flat growth in net interest income in the fourth quarter and a 13 per cent year on year decline in non-interest income.
Profit for 2014 was Dh5.66 billion, up 18 per cent.
Lending, which constitutes a big part of net interest income, was up 11 per cent in 2014, but deposits grew by just 2 per cent over the same time frame.
The bank's board was proposing a cash dividend of 1 dirham per share and the equivalent of 1.54 bonus shares for every 10 shares held for 2014, the statement said.
According to the bank's annual report for 2013, it paid the same cash dividend but gave away what equated to three bonus shares for every 10 held.
The bank also said on Wednesday it will repay by the end of January a $900 million loan originally due in December 2015.
Shares in FGB closed 0.9 per cent lower on Wednesday against a 0.3 per cent decline for the wider market. The earnings were disclosed after market hours.-Reuters
