NBF reports Dh67m profit in nine months

National Bank of Fujairah (NBF) yesterday announced that it posted net profit of Dh67 million in the first nine months against Dh228.9m in the corresponding period last year.

The bank said the third- quarter results were impacted by international market conditions which resulted in a net loss of Dh86.5m compared to Dh76m in the third quarter last year.

Investment fair value declined in the quarter was Dh133m, of which Dh109.5m was recognised through the profit and loss compared to investment income of Dh55.4m for the corresponding quarter of 2007.

An additional impairment loss of Dh69.7m has been recognised in respect of credit exposures impairment caused by the current market conditions.

"The underlying core business growth continues to be robust whilst the net results for the nine month were impacted by the global market conditions. Core operating income for three months and nine months periods ended September 2008 grew by 52 per cent and 44 per cent respectively over corresponding periods in 2007. NBF has been prudent in providing for potential impairment losses against credit exposures given current market conditions," said Steve Mullins, CEO of the bank. For the nine months period, core operating income, excluding investment fair values, showed a growth of 44.4 per cent.

Core businesses maintained strong growth on the back of volumes despite pressure on margins. Net interest income rose by 39.36 per cent and fee income grew by 40.72 per cent. NBF's foreign exchange income doubled to Dh30.75m.

"NBF's liquidity and capital adequacy ratios have been strengthened during the quarter on the back of subordinated debt of Dh400m and a new syndicated loan facility of $210m equivalent which replaced the previous facility of $130m. This new funding supported the bank in managing liquidity better during difficult market conditions and NBF remained in compliance with Central Bank regulatory ratios," added Mullins.

Total assets grew 34.34 per cent to Dh13.76 billion in the first nine months. Total shareholders' equity stood at Dh1.68bn and the bank's capital adequacy ratio at period end stood at 15.5 per cent against the Central Bank minimum of 10 per cent. The bank's operating expenses increased by 34.89 per cent largely due to investment in governance and infrastructure and strengthening of human capital.

Cost to income ratio was 51.82 per cent compared to 31.89 per cent in the corresponding quarter of 2007 reflecting lower earning levels.

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