First Gulf Bank(FGB) registered a record profit of Dh6.03 billion ($1.64 billion) for the full year 2016, compared to Dh6.01 billion in 2015, marking its 17th consecutive year of consistent growth in profitability.

Full year 2016 earnings per share (EPS) amounted to Dh1.32, compared to Dh1.31 in 2015.

Abdulhamid Saeed, FGB’s managing director and board member, said: "FGB delivered a resilient performance in 2016, amidst challenging operating conditions. The Bank’s solid results reflect consistent bottom line growth for the 17th year in a row, which is an extraordinary accomplishment. Maximising value for our stakeholders has been the hallmark of our growth story from day one. For our shareholders, this translated to total returns of around 40 times since FGB shares were listed on the Abu Dhabi Stock Exchange in June 2002. .

"This is another incredible achievement in a long list of milestones which make FGB’s history, since the bank’s establishment in 1979, so unique and one that we are so proud of. I would like to thank everyone who contributed to this remarkable journey, their unyielding trust and confidence has been our strongest asset and the engine behind our success," he added.

Andre Sayegh, CEO of FGB, said: "I am extremely pleased with our performance in 2016. I reiterate that FGB’s business model is built on a solid, yet dynamic strategy, demonstrating resilience in a challenging global operating environment, thus resulting in a record Group Net Profit of Dh6.03 Billion. Our strong set of results is testament to the success of the strategic actions we have implemented in order to navigate volatile global operating conditions."

"Throughout the years, we were able to build resilience and earnings momentum by focusing on the prudent and selective growth of risk assets, on funding cost optimisation and on the efficient allocation of resources. As a result of our focussed efforts to safeguard strong fundamentals, our Net Interest Margin held up well in the fourth quarter and our liquidity position is always optimised and maintained within regulatory requirements. The quality of our assets is excellent, our Non-Performing Loan ratio is at a 7 year low of 2.3 per cent with a Provision Coverage of 121.1 per cent," he added.

FGB’s Board of Directors recommended the distribution of a cash dividend of 100 per cent (or Dh1 per share) for the financial year ended December 31, 2016. This implies total cash dividends of Dh4.5 billion, similar to 2015. The recommended dividend proposal is subject to shareholders’ approval at the Ordinary General Assembly Meeting which will be held in Abu Dhabi on February 28.

"Although 2016 was a challenging year in many respects, the UAE proved to be one of the most resilient economies on a global level, backed by solid fundamentals and a diversified and dynamic economy. We are fully confident that the UAE and its active banking sector will continue to lead economic growth and build business momentum in the years to come. For the banking sector, 2017 will be a transformational year with the historic merger of FGB and NBAD to create a larger and stronger bank, having the financial strength and expertise to support the UAE’s long term ambitions,” Sayegh explained.

"Looking back at FGB’s successful history, I am filled with pride for what we have achieved. We came a long way – moving from a small corporate bank to an international wholesale bank; from small beginnings in retail banking into a leading franchise with a diversified business across products and geographies and from a low rated BB+ bank to a high Investment grade A+ rated company. With exciting changes just around the corner, we are looking towards the future with clear optimism, fully confident that the best chapter of our story is yet to come,” he added.

FGB and National Bank of Abu Dhabi (NBAD) continued to pave the way towards a successful merger during the final quarter of 2016, passing a series of significant milestones ahead of merger completion at the end of the first quarter of 2017.

Led by the Integration Steering Committee (ISC) and Integration Management Office (IMO), integration planning remains on schedule and the organisational structure is being further defined.

On December 7, 2016, shareholders in FGB and NBAD approved the merger of the two banks at separate quorate general assembly meetings held in Abu Dhabi. The approval of at least 75 per cent by value of the shares represented at each meeting was required to proceed with the merger. During the meetings, FGB and NBAD shareholders also ratified the combined bank’s Board of Directors, once the merger becomes effective.

Following approval from each bank’s shareholders to proceed with the creation of the UAE’s largest bank, a 30-day creditor objection period was triggered by FGB and NBAD on 12 December 2016, concluding on 11 January 2017.

While the transaction has received regulatory consent from the Central Bank of the UAE, further approvals from international regulators and the Securities & Commodities Authority (SCA) are required before the banks are legally combined into a single entity.

Upon the effective date of the merger, assets and liabilities of FGB will be automatically vested in NBAD in consideration for the issue of shares in the new NBAD entity to existing FGB shareholders. In addition, all FGB shares will be de-listed from the Abu Dhabi Securities Exchange. – TradeArabia News Service