Press Dossier    By Date   28/01/2023 FAB posts ‘historic-high’ profit of Dh13.4 billion in 2022

Khaleej Times, Saturday, Jan 28, 2023 | Rajab 6, 1444

‏FAB posts ‘historic-high’ profit of Dh13.4 billion in 2022

Emirates: First Abu Dhabi Bank (FAB) reported on Thursday record annual profitability of Dh13.4 billion, up seven per cent year-on-year for 2022.

The “historic-high profit” for FAB was driven by strong underlying business performance in a rising rate environment, prudent risk management, and cost discipline maintained amid continued investments, the largest UAE lender said in a statement.

The bank’s fourth-quarter net profit dropped to Dh2.5 billion from Dh 2.9 million in Q3’22, reflecting prudent provisioning and conservative asset valuations. Earnings per share was Dh1.18. The bank's board of directors has recommended cash dividends per share of 52 fils amounting to Dh5.7 Billion for FY’22, compared to 49 fils cash dividends distributed in the prior year.

“Double-digit balance sheet growth reflects strong business momentum; Group foundation remains robust across all key metrics,” said FAB,

Total income grew 10 per cent to Dh 23.9 billion, driven by 23 per cent growth in net interest income and gain on sale of a majority stake in Magnati; enhanced revenue diversification geographically with greater contribution from Mena, FAB said.

Impairment charges (net) rose 7.0 per cent to Dh2.8 billion, reflecting prudent provisioning with Dh1.1 billion charge taken in Q4’22. Operating costs rose 15 per cent to Dh 6.7 billion “driven by the integration of operations in Egypt (FABMisr), write-off of legacy systems in Q4’22 as part of our ongoing technology transformation strategy, as well as continued investments into the business,” FAB said.

Customer deposits rose 14 per cent to Dh701 billion and despite rising interest rates, CASA balances grew 3.0 per cent YoY. Loans, advances and Islamic financing surged 12 per cent to Dh460 billion, outperforming the industry average of 5.5 per cent, the bank said.

Sheikh Tahnoon bin Zayed Al Nahyan, Chairman of FAB, said 2022 was a year of continued strategic diversification and expansion for the UAE and regional economies, which posted their fastest economic growth in a decade. “By capitalising on the favourable macroeconomic conditions, FAB has been laying foundations for the future.”

“I remain confident that FAB will continue to play an integral role in furthering economic prosperity and sustainability efforts,” said Sheikh Tahnoon.

Hana Al Rostamani, group chief executive officer, FAB, said profit growth of 7.0 per cent year-on-year to Dh13.4 billion is a historic high for the bank. FAB has achieved another record performance in 2022, highlighting solid growth, while demonstrating the strength of its core businesses, with achievements that are in line with the bank’s medium-term strategy.

“Strong business volumes have underlined healthy pipeline execution across our diversified business model, while the fundamental strength of our balance sheet, underpinned by a strong liquidity profile and efficient capital management, allowed us to drive improvements in Common Equity Tier 1 (CET1) despite market and regulatory headwinds.”

The bank said it anticipates a relatively benign inflation outlook in 2023 compared to many parts of the world, which should provide welcome stability against the macroeconomic backdrop.

“However, the region will not be immune to global price pressures and economic slowdown. Hence, we forecast a more modest real GDP growth rate of around 5.0 per cent for UAE in FY’23, although that growth should be more sustainable as economic diversification continues to evolve.”

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