FUJAIRAH, (Pakistan Point News - 21st Jul, 2019) National Bank of Fujairah, NBF, has announced its results for the six month period ended 30th June, 2019. NBF posted a record net profit of AED357.1 million, a rise of 15.1 percent over the corresponding period of 2018, which exhibits its resilient business strategy.
The bank also recorded its best-ever half-year operating profit of AED567.0 million which increased by 9.1 percent, compared to AED519.9 million in the corresponding period of 2018 driven by the focus on steady quality business growth.
Operating income for the six month period was AED841.5 million which saw a growth of 9.5 percent, compared to the corresponding period of 2018. This was achieved by growth in core business volumes, proactive asset and liability management, and effective pricing strategies.
Net interest income and net income from Islamic financing and investment activities grew by 7.3 percent and net fees and commission income by 13.8 percent, compared to the corresponding period of 2018. Income from investments and Islamic instruments marked a significant bounce back; fair value gain on fair value through profit or loss and fair value through other comprehensive income investment portfolio improved by AED50.3 million.
Foreign exchange and derivatives income experienced a growth of 6.0 percent reaching AED74.2 million, compared to AED70.0 million in 2018.
Operating expenses increased by 10.3 percent, reflecting NBF’s investments in businesses, infrastructure and digitalisation initiatives to provide exceptional customer service and enhanced experience in line with the changing market demands. Cost-to-income ratio stood at 32.6 percent, compared to 32.4 percent in the corresponding period of 2018 and 33.2 percent for the year ended 31st December, 2018.
NBF maintained net impairment provisions of AED209.9 million, compared to AED209.7 million in 2018. Total provision coverage ratio (including impairment reserves) improved to 108.6 percent from 102.0 percent as at 31st December, 2018. The nonperforming loan ratio improved to 4.8 percent, compared to 5.1 percent as at 31st December, 2018.
Loans and advances and Islamic financing receivables rose 6.6 percent from AED26.2 billion at 2018 year-end to AED27.9 billion, and up by 7.2 percent from 30th June, 2018. The growth compares well relative to the marginal increase in credit growth at the industry level, reported in May 2019 in the UAE Central Bank’s statistics report.
Customer deposits and Islamic customer deposits depicted a growth of 1.7 percent at AED31.0 billion, compared to AED30.5 billion at 2018 year-end, up by 10.0 percent from 30th June, 2018.
Assets reached AED42.5 billion; a rise of 6.9 percent from AED39.8 billion at 2018 year-end, up by 11.7 percent from 30th June, 2018.
Shareholders’ equity rose 5.1percent from AED 5.1 billion at 2018 year-end to AED 5.4 billion, up by 10.5percent from 30 June 2018.
Strong capital adequacy and lending to stable resources ratios were maintained at 15.6 percent (Tier 1 ratio of 14.5 percent and CET 1 ratio of 13.0 percent) and 89.6 percent respectively, well ahead of CBUAE minimum requirements. Further, Eligible Liquid Assets Ratio, ELAR, and advances to deposits ratio remained strong at 19.7 percent and 90.1 percent respectively.
Return on average assets was 1.74 percent, up from 1.66 percent for the corresponding period in 2018. Return on average equity was 13.60 percent, up from 12.71 percent for the corresponding period in 2018.
NBF’s rating was re-affirmed at Baa1 / Prime-2 for deposits and A3 for counterparty risk assessment by Moody’s and BBB+ / A-2 by Standard & Poor’s, both with a stable outlook, highlighting the bank’s underlying strength, prudent risk management and resilience.
Easa Saleh Al Gurg, KCVO, CBE Deputy Chairman, said, "We are pleased to see record half-year results, particularly in the face of low economic activity in the market. It is encouraging that NBF is able to maintain its growth momentum through a clear focus on its core business, effective execution of its business and operational strategy, enhanced return on capital and differentiation through exceptional customer service.
