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Year-to-date, FAB has increased net incremental lending by nearly AED50 billion, a record for the group in any half-year period
FAB said its total revenue was Dh12.5 billion, up 31 percent year-on-year, including a Dh3.1 billion net gain from the sale of a majority stake in its payments company Magnati. — file photo
First Abu Dhabi Bank (FAB), the UAE’s largest bank, reported on Thursday that first-half net profit rose 50% to AED8 billion on higher revenue and moderate risk costs.
In a statement, FAB said its total revenue was AED12.5 billion, up 31 percent year-on-year, including a AED3.1 billion net gain from the sale of a majority stake in its payments company Magnati.
Group chief executive Hana Al Rostamani said FAB had a strong first six months of 2022 despite heightened volatility in global markets.
“Our core business maintains solid growth momentum, reflecting the healthy pipeline execution of our diverse franchises and our continued strategic focus on deepening client relationships.”
She said FAB had increased its net incremental lending by nearly Dh50 billion year-to-date, a record for the group in any half-year period.
“This demonstrates robust regional activity, FAB’s leading origination capabilities, and the fundamental strength of our balance sheet as we continue to deploy our resources and expertise to support our client franchises, satisfying their local and cross-border banks Business needs.”
“Looking ahead, we must recognize a more challenging global economic outlook characterized by volatile market conditions and inflationary pressures. As we enter the second half of the year, we remain committed to our clients and stakeholders, and We are confident in our ability to deliver sustainable shareholder returns as we pursue our growth and transformation plans,” said Al Rostamani.
Group CFO James Burdett said the bank delivered another solid second quarter, with net profit of AED2.9 billion, up 13% quarter-on-quarter, bringing the first half of 2022 profit to 2.3%. 8 billion dirhams. Annualized return on tangible assets in 1H22 increased to 19.5% from 13.6% in 1H21.
“During the last quarter, all of our core businesses delivered quarter-over-quarter revenue growth, with double-digit growth in Investment Banking and Corporate and Commercial Banking, a strong performance against unfavorable global market conditions. Risk management is prudent across the group, and the year-on-year increase in operating expenses reflects continued investment in franchise growth and transformation,” he said.
FAB maintains a strong liquidity position with a Group Liquidity Coverage Ratio of 135% and its balance sheet is optimally positioned to continue to benefit from rising interest rates. Despite balance sheet growth and market and regulatory headwinds, capital buffers remain strong, with Common Equity Tier 1 (CET1) at 12.6%, Burdett said.
Operating expenses surged 10% to AED1.6 billion in the quarter, driven by continued investment in franchise growth and transformation.
The bank’s non-performing loan ratio was 3.6% in the quarter, down from 3.9% a year earlier and 3.8% in the first quarter. Its liquidity coverage ratio was 135%, up from 119% a year ago.
Loans, advances and Islamic financing rose 6% month-on-month to AED459 billion, up 12% year-to-date.Double-digit loan growth reflects continued business momentum, while liquidity, asset quality and capital positions remain strong
Customer deposits were AED648 billion, up 8% month-on-month and 5% YTD; CASA balances were AED291 billion, up 15% year-on-year.
— issacjohn@khaleejtimes.com
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