Abu Dhabi April 27 2023: National Bank of Fujairah (NBF) announced its results today for the first quarter of 2023 ending 31st March.
NBF recorded year-on-year growth of 151.8 percent to close the three month period at a net profit of AED 152.0 million compared to AED 60.4 million in the corresponding period of 2022. This demonstrates the bank’s enhanced focus on quality business, an efficient funding base and improving resilience facilitated by notable local growth despite the uncertain geopolitical conditions and global environment.
Supported by higher net interest income and net income from Islamic financing and investment activities and fee income, NBF posted an operating profit of AED 397.9 million for the three month period, a rise of 35.7 percent compared to AED 293.2 million in the corresponding period of 2022 and up 30.9 percent quarter-on-quarter.
Operating income reached AED 554.1 million, up 34.2 percent compared to AED 412.8 million in the corresponding period of 2022 and up 12.0 percent compared to Q4 2022 reflecting the robust core business performance, good levels of activity and enhanced asset and liability management in a rising interest rate environment.
Net interest income and net income from Islamic financing and investment activities, up 69.4 percent and net fees, commission and other income, up 6.6 percent compared to the corresponding period of 2022, reaching AED 404.1 million and AED 112.8 million respectively; and experienced a growth of 10.5 percent and 24.5 percent respectively compared to Q4 2022.
Foreign exchange and derivatives income stood at AED 40.1 million compared to AED 47.1 million in the corresponding period of 2022 and up 3.3 percent compared to Q4 2022.
Loans and advances and Islamic financing receivables rose by 2.3 percent to reach AED 27.5 billion compared to AED 26.9 billion at 2022 year-end, up by 1.2 percent from 31st March 2022.
Investments and Islamic instruments increased by 12.7 percent to reach AED 7.2 billion compared to AED 6.3 billion at 2022 year-end, up by 97.1 percent from 31st March 2022 evidencing the deployment of a portion of liquidity towards a high-quality investment book offering good risk-to-return as well as access to market liquidity.
The capital adequacy ratio (CAR) stood at 18.0 percent (Tier 1 ratio of 16.8 percent and CET 1 ratio of 13.2 percent) compared to 18.6 percent (Tier 1 ratio of 17.4 percent and CET 1 ratio of 13.6 percent) at 2022 year-end and is being maintained at this level to support the bank’s ability to grow and to meet any challenges that may arise from the evolving global economy.
Customer deposits and Islamic customer deposits stood at AED 34.8 billion compared to AED 35.7 billion at 2022 year-end, up by 8.3 percent from 31st March 2022. Current and Saving Accounts (CASA) deposits stood at 43.2 percent of total customer deposits softening the impact of increasing rates for fixed term products on deposit costs.
Total assets remained stable at AED 47.5 billion compared to AED 47.6 billion at 2022 year-end, up by 11.5 percent from 31st March 2022.
Return on average assets improved to 1.3 percent, up from 0.6 percent for the corresponding period in 2022, while return on average equity improved to 10.2 percent, up from 4.2 percent for the corresponding period in 2022.
Dr. Raja Easa Al Gurg, Deputy Chairperson, said, “We are pleased to see an impressive start to 2023 with a robust set of results for the first quarter supported by the relatively buoyant business environment and the government’s commitment to diversifying the UAE’s economy. Likewise, NBF’s staunch focus on quality growth in supporting our customer’s business across all principal segments, improvement in asset quality and proactive management of investment portfolio enabled it to achieve a strong overall financial performance.
‘’Despite the uncertain global landscape dominated by significant geopolitical developments, lingering inflationary pressures exacerbating growth concerns and the recent stress seen in the global financial system, the UAE has progressed well on the back of the government’s efforts and disciplined approach helped by significant hydrocarbon demand as the energy transition unfolds at various speeds across the globe. This was evidenced by the UAE achieving an exceptional 7.9 per cent GDP growth in 2022; and it is anticipated to continue growing at a steady pace.
‘’NBF is well positioned to gain from this growth and has built the platform for enhanced value creation aided by its robust capital and liquidity position, digitally enabled bank strategy for better servicing client needs, prudent risk and compliance management standards and a sound balance sheet,'' Al Gurg added.