Finance House profit slides 9%

Abu Dhabi-based Finance House (FH) net profit in the first quarter nearly nine per cent to Dh29.3 million as compared to Dh32.1m for the same period last year.

Net interest income stood at Dh31.3 million as compared to Dh30.2 million while net fee and commission income jumped to Dh8.3 million from Dh4.6 million.

Operating income fell slightly to Dh52.7 million primarily on account of fair value reductions in its trading portfolio.

As of 31 March 2011, customer deposits reached an all-time high of Dh1.59 billion, an increase of 30 per cent. Total assets as of 31 March 2011 reached Dh3.22 billion - representing a 33 per cent increase over the same period last year.

Mohammed Abdulla Alqubaisi, Chairman of Finance House, said: “Despite the temporary setbacks, we are pleased to announce that Finance House has maintained its profitable stance, with the major part of the company’s net profit coming from our core business, which has grown steadily over the years”.

Shareholders’ equity stood at Dh551 million compared to Dh520 million at the same time last year.

In the Annual General Meeting held on March 21, 2011, the shareholders approved a cash dividend of 15 per cent and a stock dividend of 10 per cent.

“The overall size of our loan book has not grown during the quarter, with new disbursements roughly matching repayments on existing loans.  However, we expect to see a robust growth in our loan book from Q2 onwards, in line with our growth strategy. We continue to maintain a cautious approach towards managing our investment portfolio. Notwithstanding the unexpected steep fall in prices of UAE stocks in Q1, our investment portfolio as a whole has performed relatively well, with a positive contribution to net income.

“As to liquidity, the company has a robust system in place for managing its cash flows. We remain confident that our strategy of continuously seeking and addressing profitable niche segments will enable us to continue generating above average equity returns for our shareholders on a sustained basis”, concluded Alqubaisi.

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