First Abu Dhabi Bank (FAB) has delivered record results for the first half of 2024, with a net profit of AED8.4 billion ($2.29 billion) and revenue of AED15.7 billion ($4.27 billion) (+16% yoy) underlining the bank’s consistent growth trajectory. 

 

Profit before tax grew 15% yoy to AED10.0 billion. Q2’24 net profit was AED4.3 billion, and operating income was AED7.8 billion (+14% yoy). 

 

FAB’s robust results were driven by double-digit growth across interest and non-interest income sources, helped by strong business momentum, expansion in Net Interest Margin (NIM), and an improved revenue mix, with Non-Funded Income (NFI) contributing 38% to Group revenue, up from 35% in H1’23. 

 

Largest bank

As of June-end 2024, FAB reinforced its position as the largest bank in the UAE with total assets at AED1.2 trillion. Loans, advances and Islamic financing grew 6% both ytd and yoy to AED513 billion, reflecting healthy demand and market share gains across key segments and geographies. 

 

In the first half of 2024, FAB delivered a return on tangible equity (RoTE) of 17.3%, including 18.1% in Q2 2024, demonstrating the group’s laser focus on shareholder value. Balance sheet fundamentals remained strong through solid asset quality metrics, with a non-performing loans (NPL) ratio of 3.7%, and a strong liquidity profile displayed in a liquidity coverage ratio of 152%. The Group’s cost-to-income ratio of 24.4% as of June-end 2024 demonstrated superior operating efficiency. 

 

Hana Al Rostamani, Group Chief Executive Officer of FAB, said: “FAB is reaffirming its position as a leading force in the Mena banking sector, with the group delivering another strong set of results in the second quarter and first half of 2024. Group net profit and revenue both reached new highs, at AED8.4 billion and AED15.7 billion, respectively. 

 

Market opportunities

“FAB continues to leverage its international network to capitalise on market opportunities across the globe. The bank is actively building and expanding business corridors in close alignment with national ambitions, reinforcing our international franchise as a foundation for growth and resilience.

 

“During the first half of 2024, we continued to unlock long-term value through sustainable growth and diversification, strategic partnerships, and enhanced customer experience and service delivery through innovation and future technologies.

 

“Our outlook remains anchored in the strong fundamentals of the UAE and Abu Dhabi as a global economic powerhouse and preferred hub for investment, talent, and innovation. We remain on track to meet our 2024 and medium-term guidance, and to deliver sustainable shareholder returns.”

 

Lars Kramer, Group Chief Financial Officer of FAB, added: “Building on a robust first quarter, we are very pleased with our progress in the first half of 2024. We continued to achieve high returns at scale while driving diversified growth across our franchise and investing strategically in order to create future efficiencies. 

 

“Consistent growth in both interest and non-interest income sources reflect our efforts to enhance cross-sell and deepen client relationships, leveraging our differentiated strengths and international footprint.

 

Lending momentum

“While lending momentum was healthy year-to-date, we have also benefited from incremental improvements in net interest margins for the fourth consecutive quarter, reflecting dynamic balance sheet management and optimal positioning ahead of a shift in interest rates. 

 

“With our leading liquidity position and high-quality risk profile, we are upholding very strong fundamentals including a rock-solid capital base, which consolidated further following our Tier 2 bond issuance earlier this month.”

FAB reported strong performance across all business lines in H1’24, led by Investment Banking and Global Markets with significant increases in operating income of 23% yoy and 26% yoy, respectively. Consumer Banking operating income advanced 16% yoy, reflecting double-digit growth in loans and deposits, new customer acquisitions, enhanced digital service and compelling product offerings. 

 

Private Banking and Corporate & Commercial Banking continued to accelerate client acquisitions and client activity, with the former reporting 25% growth in assets under management.  The Group’s international revenue was up 30% yoy, while operating income growth in the UAE also remained strong at +13% yoy.

 

Key Operational Highlights for H1’2024

•Fostered the development of regional capital markets as a key facilitator of landmark transactions raising AED7 billion in equity capital market transactions. 

•Continued strong momentum in Egypt through FABMisr, complemented by healthy growth in other markets including KSA and India. 

•Continued deployment of AI and Gen-AI capabilities across the Group, including the deployment of 

FAB’s first in-house conversational analytics tool, and the launch of AI Academy in collaboration with 

Microsoft.

•Facilitated over AED52 billion of sustainable and transition financing in Q2’24 and AED78 billion in H1’24, taking total projects to date to AED200 billion or 41% of FAB’s 2030 pledge of AED500 billion, the largest commitment by any Mena company and half of UAE banks’ commitment. 

•Leading ESG ratings: Best ESG Risk category of Mena banks by Sustainalytics with a Low ESG Risk rating, Best Refinitiv ESG score in the Middle East (top 10% worldwide), and Best MSCI ESG Score among UAE banks.--TradeArabia News Service