FAB reports full year 2022 Group Net Profit of AED13.4 billion, up 7% yoy

First Abu Dhabi Bank (FAB) has reported a Group Net Profit of AED13.4 billion during 2022, up 7% year-on-year (yoy) compared to the same period in 2021, with earnings per share at AED1.18.

H.H. Sheikh Tahnoun bin Zayed Al Nahyan, National Security Adviser and Chairman of FAB, said, "2022 was a year of continued strategic diversification and expansion for the UAE and regional economies, which posted their fastest economic growth in a decade. By capitalising on favourable macroeconomic conditions, FAB has been laying the foundations for the future.

“The bank has also been at the forefront of the UAE's progress in driving sustainable growth amid a turbulent global backdrop, supported by structural reforms, high oil prices and recovery across non-oil economic sectors.”

Sheikh Tahnoun noted that the achievements emphasise FAB's continuing role as an engine for the region's economic prosperity, acting as an enabler to unlock new opportunities for clients and stakeholders across the bank's franchise.

He continued, "We have made solid progress against this vision over the year. In achieving the Group's highest annual revenue and net profit to date, FAB has strengthened its strategic position to build a future-proof bank and advance the interests of our customers, community, and stakeholders.

"In line with our firm commitment to creating long-term sustainable value for our shareholders, FAB's Board of Directors recommends a cash dividend per share of 52 fils for the full year ended 31st December 2022, compared to 49 fils in 2021."

Sheikh Tahnoun stated, "As the region continues to push forward with ambitious sustainability targets, and with the UAE due to host COP28 in 2023, we now share a responsibility to work together to unlock the nation's full potential, and to shape a more prosperous future for all. FAB recognises this and has committed to being a pacesetter for the regional energy transition.

"I remain confident that FAB will continue to play an integral role in furthering economic prosperity and sustainability efforts, and we look forward to the opportunities that lie ahead for the Group as we continue to pursue our growth journey."

In a statement on Thursday, the bank said that the Q4'22 net profit was AED2.5 billion, compared to AED2.9 billion in Q3'22.The total income reached AED23.9 billion, up 10% yoy, driven by 23% growth in net interest income, gain on sale of a majority stake in Magnati and enhanced revenue diversification geographically with greater contribution from MENA.

The bank's operating costs stand at AED6.7 billion, up 15% yoy, driven by the integration of operations in Egypt (FABMisr), write-off of legacy systems in Q4'22 as part of FAB's ongoing technology transformation strategy, as well as continued investments into the business.

The impairment charges (net) reached AED2.8 billion, up 7% yoy, reflecting prudent provisioning with AED1.1 billion charges taken in Q4'22. The fiscal year 2022 cost of risk gained 62 bps compared to 65 bps in the prior year.

Loans, advances and Islamic financing were up by 12% to AED460 billion, outperforming the industry average of 5.5%. Customer deposits were up by 14% to AED701 billion; despite rising interest rates. The CASA balances grew by 3% yoy.

Moreover, the liquidity Coverage Ratio (LCR) amounted to 154%, underlining strong liquidity and funding profile. The Nonperforming Loan (NPL) ratio reached 3.9% with provision coverage of 98%.

The Common Equity Tier 1 (CET1) reached 12.6% post-proposed dividends, improved by 19bps yoy on the back of earnings generation and RWA optimisation.

FAB's Board of Directors recommended cash dividends per share of 52 fils amounting to AED5.7 billion for the fiscal year 2022, compared to 49 fils cash dividends distributed in the prior year.

Hana Al Rostamani, FAB Group Chief Executive Officer, commented, "Strong business volumes have underlined healthy pipeline execution across our diversified business model, while the fundamental strength of our balance sheet, underpinned by a strong liquidity profile and efficient capital management, allowed us to drive improvements in Common Equity Tier 1 (CET1) despite market and regulatory headwinds. In line with our strategy to diversify sources of income and expand internationally, we continued to consolidate and build our presence in priority markets, including in Egypt through FABMisr.

Underlying operating performance across our core businesses was sustained during the fourth quarter despite a more challenging global macroeconomic outlook. This has provided us the headroom to further build provision buffers, take a conservative stance on asset valuations, and continue investing in our technology platform.

I am proud of our progress in 2022 in several strategic areas, including advancing customer experience, expanding our specialised offerings, and leveraging strategic partnerships to drive value creation across the business. This has led to significant outcomes that have resulted in FAB being the #1 UAE bank in MENA DCM and ECM League tables and the #1 loan agent in MENA by volume of deals, as well as delivering double-digit growth in our international revenue."

She added, "As the UAE enters the Year of Sustainability, we continue to play a crucial role in helping to deliver the region's sustainable finance agenda, with FAB facilitating over US$9 billion worth of sustainable projects, in line with our $75 billion target by 2030. We also made steady progress in rolling out sustainability-linked products across all customer groups and reaffirmed our leadership position in the Green Bond market, with around half of our 2022 issuances executed in a green format across several different currencies."

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