Finance House profit hit by rise in operational costs

Finance House net profit marginally rose to Dh81.3 million for the nine months ended on September 30, 2014, compared to Dh80.2 million in the corresponding period of the previous year, hit by a rise in operational costs.

Net fee and commission income grew 49 per cent to Dh48.8 million compared to Dh32.7 million in the first nine months of the previous year.

Income from investments grew 44 per cent to Dh95.1 million in the first nine months of 2014 compared to Dh66.2 million in the same period last year. Net interest income and income from Islamic financing and investmest assets was up 4 per cent at Dh101.4 million compared to Dh97.6 million in the same period last year.

Total operating income increased nearly 20 per cent to Dh231.8 million compared to Dh193.9 million.

Operating expenses in 9 months increased from Dh90.6 million to Dh123.6 million, a jump of 36 per cent.

In line with its conservative approach towards impairment provisioning, the firm set aside additional impairment provision of Dh26.9 million in the first nine months of 2014 compared to Dh23.1 million in the same period last year.

Assets grew 24.6 per cent to reach Dh5.13 billion as of September 30, 2014 compared to Dh4.12 billion as of December 31, 2013. Customers’ deposits grew 27.3 per cent during the first nine months of 2014 to reach an all-time high of Dh2.77 billion as of September 30, 2014 compared to Dh2.18 billion as of December 31, 2013. Net loans and advances including Islamic financing and investing assets grew by a robust 46.4 per cent during the first nine months of 2014 to reach Dh2.31 billion as of September 30, 2014, compared to Dh1.58 billion as of December 31, 2013.

The resultant loans to deposits ratio as of September 30, 2014 stood at 83.3 per cent, leaving ample room for growth in lending book in the near term.

Shareholders’ equity as at September 30, 2014 stood at Dh758.4 million compared to Dh729 million as of 31 December 2013. This is after distributing a generous cash dividend of 25 per cent in April 2014, amounting to Dh75.6 million for the year ended 31 December 2013.

Mohammed Abdulla Alqubaisi, Chairman of Finance House, said: “In line with the sustained pick-up in economic activity across the UAE, we continue to focus on our core engines of growth which are commercial and consumer lending and proprietary investments.”

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