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04 December 2023

Operating income boosts FGB and ADCB’s 2015 profits

By Reuters

Abu Dhabi Commercial Bank (ADCB) reported a 16 per cent rise in fourth-quarter net profit on Sunday, aided by higher revenue and lower impairments.

The earnings continued a mixed fourth-quarter results season for UAE banks, with Emirates NBD and Dubai Islamic Bank reporting bumper profit growth but National Bank of Abu Dhabi, Mashreq and Union National Bank recording profit slumps.

ADCB, the emirate's third-largest bank by assets, made a net profit attributable to shareholders of Dh1.19 billion ($324 million) in the three months to Dec. 31, compared with Dh1.02 billion in the corresponding period of the previous year, it said in a bourse statement.

Two analysts polled by Reuters had forecast net profit for the quarter of Dh986 million and Dh1.12 billion respectively.

The earnings were boosted by a 7 per cent year-on-year increase in quarterly operating income to Dh2.01 billion, while the amount the bank set aside to cover bad loans was 28 per cent lower than the fourth quarter of 2014 at Dh110 million.

Naveed Ahmed, senior manager at Global Investment House, said he was positive on the results, noting the "massive drop in its provisions due to improvement in asset quality".

ADCB made a 2015 net profit of Dh4.92 billion, up 22 per cent on 2014, it said in the statement.

Total loans at the bank stood at Dh153.68 billion on Dec. 31, up 9 per cent on the end of the previous year. Customer deposits reached Dh143.53 billion, up 14 per cent.

The bank also proposed a cash dividend of Dh0.45 per share for 2015, against the Dh0.40 dirhams it paid for 2014.  


First Gulf Bank board keeps 2015 cash div at Dh1/share

First Gulf Bank, the largest lender by market value in the United Arab Emirates, beat estimates on Sunday as it reported an 11 per cent rise in fourth-quarter profit.

It is the second Abu Dhabi bank to report positive earnings on Sunday after Abu Dhabi Commercial Bank posted a 16 per cent quarterly profit gain.

It had up until now been a broadly disappointing earnings season for the emirate's lenders, with National Bank of Abu Dhabi and Union National Bank reporting falling profits.

FGB made a net profit of Dh1.72 billion ($468.4 million) in the three months ending Dec. 31 compared with Dh1.55 billion in the same period a year earlier, it said in a statement. Analysts polled by Reuters had forecast an average net profit for the quarter of Dh1.46 billion.

The earnings improvement was largely due to Dh681 million of what the bank called "other operating income", although it did not specify what this derived from.

This income helped offset writedowns that had more than doubled year on year to Dh507 million, as well as a 6 per cent decline in fees and commission income.

Net interest income rose 2 per cent to Dh1.66 billion.

For 2015, the bank said net profit was Dh6.01 billion, up 6 per cent from 2014, which Chief Executive Andre Sayegh said was achieved despite "a challenging operating environment".

In November, FGB cut close to 100 jobs, sources told Reuters, part of an increasing wave of redundancies at Emirati banks as they adjust to deteriorating market conditions caused by lower oil prices after a period of significant expansion.

The bank retained its cash dividend at Dh1 per share for 2015, although the proposed payout indicated there would be no free shares distributed as there had been for 2014.

Loans and advances totalled Dh149.8 billion at the end of 2015, up 7 per cent on the year, while deposits were flat over the same time period at Dh142.5 billion.