First Abu Dhabi Bank (FAB), the UAE’s largest bank and one of the world’s largest and safest financial institutions, has reported a net profit of Dh8.09 billion ($2.20 billion) for the nine-month period ended September 2017, down 4 per cent year-on-year, or up 2 per cent when excluding one-off gains on sale of investment properties. 

 

In the third quarter of 2017, group net profit was up 2 per cent sequentially to Dh2.61 billion on the back of a notable improvement in cost of risk, and disciplined cost control coupled with the realisation of merger synergies ahead of plan, the bank said. 

 

Compared to the third quarter of 2016, group net profit was down 18 per cent, or only 4 per cent lower when excluding one-off gains on sale of investment properties. 

 

The total group revenue for the nine-month period was Dh14.48 billion.

 

As of September-end 2017, the group enjoys ample liquidity with a loans-to-deposits ratio at 86.6 per cent. In addition, capital position notably strengthened with CET1 reaching 14.6 per cent, up from 13.8 per cent last year. While total assets grew 2 per cent year-on-year, balance sheet optimisation has led to a 3 per cent reduction in risk weighted assets. As a result, the group generated solid risk adjusted returns with RoRWA at 2.2 per cent, stable year-on-year.  

 

Abdulhamid Saeed, group chief executive officer of FAB, said: “FAB’s performance in the first nine months of 2017 demonstrates the group’s resilience as it continues to achieve integration milestones and deliver solid results against an operating backdrop that is improving, yet remains challenging. As we approach the end of 2017, I am very pleased with the excellent progress we have made in our integration journey. As we align our products and services, and further drive innovation and the right digital solutions across all areas of the business, we continue to place our clients first and work towards enhancing long-term customer experience across all business groups. 

 

“In a strong testament to our leading position as a financial services provider in the UAE and the broader region, and despite a subdued loan market, FAB is dominating the GCC and Mena loan league tables’ year-to-date with a 14.3 per cent and 12.7 per cent market share respectively. In addition, FAB was recognised by Global Finance as the safest bank in the UAE and the Middle East, and also the 4th safest bank in emerging markets, the 17th amongst commercial banks and the 31st amongst all banks, worldwide.”

 

He added: “As we continue to build strong foundations to support the long term sustainable growth of our franchise, we are on track to meet our targets for the current year and our strong capital buffers provide us with ample room to deliver top returns for our shareholders.”

 

Integration and other updates

The bank’s overall integration strategy is to leverage on the key strengths from legacy banks in order to create value for FAB customers, employees, shareholders and communities. Since the merger was completed earlier this year in April, the group has made significant progress in the integration journey. This included the finalisation of the bank’s organisational structure, operating model, and the harmonisation of group policies and our risk framework. The optimisation of branches and centralisation of back office activities are also underway, to enhance efficiency and productivity across the business. 

 

The launch of FAB’s new brand identity was quickly followed by the full re-brand of a number of branches and customer touchpoints both locally and internationally, with the optimisation of the bank’s global locations set to continue. Full network and channel re-brand across all critical customer touch-points is expected to be completed by the end of the current year. Good progress has also been made towards IT system integration, which is on track. From a financial standpoint, merger benefits are materialising quickly and ahead of plan, and one-time integration costs are well under control.  

 

In parallel to the integration project, FAB is focused on driving further innovation across all areas of the business to significantly grow its product and service range. The bank recently appointed a Group Chief Customer Experience and Digital Officer to look after the enterprise-wide alignment of FAB’s digital services and enhance long-term customer experience. -TradeArabia News Service