UAE banks announce mixed Q1 results; DIB, NBF up

Five UAE banks today announced mixed results in terms of profitability for the first quarter 2016.

Dubai Islamic Bank (DIB), the United Arab Emirates' largest Shariah-compliant lender, posted a 7.2 per cent increase in first-quarter net profit on Wednesday on the back of higher revenue and setting aside less cash for bad debts.

The bank made an attributable profit of Dh875.3 million ($238.3 million) in the three months to March 31, it said in a statement. This compares with a profit of Dh816.7 million in the corresponding period of 2015.

EFG Hermes had forecast DIB would make a quarterly profit of Dh938 million.

The bank's net profit including non-controlling interests jumped 17.7 per cent to Dh1 billion.

DIB said its profit increase was due to higher income, which surged 21.8 per cent to Dh2.11 billion, and a drop in loan impairments, which fell 13 per cent to Dh118 million.

Revenue was lifted by a 21.3 per cent increase in net income from Islamic financing to Dh1.53 billion, and a 37 per cent jump in income from fees, commissions and foreign exchange to Dh417.9 million.

Fee income has been one of the ways in which regional banks have boosted revenues at a time when record low interest rates have kept net interest margins under pressure.

The bank's income in recent quarters was driven in part by strong lending growth, which has been above that of many of its peers.

Total lending rose 5.9 per cent year-on-year to stand at Dh102.9 billion on March 31, with deposits gaining 11.4 per cent over the same time frame to Dh122.5 billion.

DIB aims to continue that trend in 2016, with chief executive Adnan Chilwan saying in January the bank was targeting loan expansion of between 10 and 15 per cent.

NBF quarterly profit inches up

National Bank of Fujairah (NBF) posted Q1 net profit of Dh150.5 million compared to Dh149.5 million in the corresponding period of 2015, depicting a growth of 0.7 per cent year on year against an exceptionally strong Q1 in 2015 and significantly higher than the Dh104.9 million reported in Q4 2015.

Operating profit was Dh223.1 million compared to Dh188.3 million in the corresponding period of 2015; a rise of 18.5 per cent. Furthermore, fee to income ratio stood at 38.2 per cent compared to 35.5 per cent in the corresponding period of 2015.

Net impairment losses were Dh72.6 million compared to Dh38.8 million in the corresponding period of 2015 and Dh75.8 million in Q4 2015. The NPL ratio was 4.8 per cent compared to 4.7 per cent as at December 31, 2015.

NBAD profit drops as impairment charges rise

Abu Dhabi's three largest banks reported a slide in first-quarter net profits on Wednesday, mainly the result of higher bad debt provisions.

The bosses of National Bank of Abu Dhabi (NBAD), Abu Dhabi Commercial Bank and First Gulf Bank all said the business environment was tough, partly reflecting the impact of a near two-year slump in oil prices on the wider economy.

"We expect provisions to be higher this year as non-performing loans increase from higher exposure to the SME sector and also because of debt restructuring relating to certain large companies," Chiradeep Gosh, banking analyst at Bahraini investment bank SICO, said.

NBAD, the emirate's largest bank by assets, reported a 10.7 per cent fall in net profit on an annual basis to Dh1.27 billion ($345.8 million) in the quarter ending March 31 as impairment charges rose and revenues dropped.

Two analysts polled by Reuters had forecast a profit of Dh1.28 billion and Dh1.45 billion respectively.

Revenues reached Dh2.65 billion, down from Dh2.68 billion. Impairment charges were Dh295 million, up 73.3 per cent on the corresponding period last year.

National Bank of Abu Dhabi is confident of its ability to deliver single-digit earnings growth in 2016, said the bank's chief financial officer on Wednesday.

James Burdett was speaking on a media conference call after the bank posted a 10.7 per cent fall in first-quarter net profit as revenues dropped and impairment charges for bad loans rose.

Chief Executive Alex Thursby had said in January that the bank expected low single-digit earnings growth in 2016 and "moderate to good" loan growth.

Also on Wednesday's call, Thursby said the bank's provisions were expected to experience a slow decline in subsequent quarters, although NBAD would have to remain careful to manage the situation.  

ADCB Q1 net profit drops 18.2%

Abu Dhabi Commercial Bank (ADCB) on Wednesday posted a 18.2 per cent fall in first-quarter net profit, as income from its core business dipped and provisions increased.

The third largest bank by assets in the United Arab Emirates made a net profit attributable to shareholders of Dh1.02 billion ($277.7 million) in the three months to March 31, compared to Dh1.25 billion in the same period a year ago, it said in a bourse statement.

Two analysts polled by Reuters had forecast a net profit for the quarter of Dh1.13 billion and Dh1.28 billion respectively.

The amount of cash ADCB set aside for bad loans rose to Dh352.2 million in the first quarter, compared with Dh241.3 million last year.

Much of this was the bank bolstering its general provisions to account for an increase in the size of the loan book, in light of current market conditions, it said.

Loans and advances rose 11 per cent to stand at Dh156.7 billion as of March 31, ADCB said.

A 4 per cent decline in income from its core business, known as net interest and Islamic financing income, to Dh1.57 billion also contributed to the profit drop.

Deposits rose 15 per cent to Dh147.3 billion at March 31, ADCB said, compared with Dh128.5 billion at the same point last year.

First Gulf Bank profit falls on lower fee income

First Gulf Bank on Wednesday posted a 6 per cent fall in first-quarter net profit as income from fees and commission slipped.

The third largest bank by assets in Abu Dhabi made a net profit attributable to shareholders of Dh1.33 billion ($362.2 million) in the three months to March 31, compared to Dh1.42 billion in the same period a year ago, it said in a bourse statement.

Two analysts polled by Reuters had forecast a net profit for the quarter of Dh1.27 billion and Dh1.51 billion respectively.

Fees and commission income was down 10 per cent between the first quarter of last year and the same period of this year at Dh365 million, while net interest and Islamic financing income was broadly flat over the same period at Dh1.59 billion.

Provisions for bad loans reached Dh376 million at the end of the first quarter, up 1 per cent from the year-earlier period.

Loans and advances rose 7 per cent year on year to stand at Dh152.5 billion as of March 31, FGB said. However, deposits over the same timeframe declined 2 per cent to Dh140.8 billion.

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