First Abu Dhabi Bank Profits Soar Amid UAE Economic Momentum
First Abu Dhabi Bank (FAB), the largest lender in the UAE, has recorded a remarkable 45% increase in its second-quarter net profit, driven by the country's ongoing economic momentum.
First Abu Dhabi Bank Reports Strong Growth in Second-Quarter Net Profit Amid Economic Momentum
The bank reported net income attributable to shareholders of Dh4.2 billion ($1.14 billion) for the three months ending in June, according to a filing with the Abu Dhabi Securities Exchange. This positive growth was supported by a surge in operating income, which climbed 37% year on year, bolstered by significant growth in interest and non-interest income. FAB's net interest income also saw a substantial increase of 39% to Dh4.3 billion during the same period, further contributing to its robust financial performance.
Achievements and Strategic Growth
Hana Al Rostamani, the FAB group chief executive, expressed pride in the bank's achievements, stating that their steady progress aligned with their growth strategy and reinforced their position as the preferred financial institution. The positive growth momentum was evident across all business lines, allowing FAB to deliver exceptional financial and banking products and services to clients, while supporting the UAE's global financial hub status. The bank's strategic focus on revenue diversification was reflected in the increased contribution of non-interest income to the group's revenue, accounting for 34%.
Rising Interest Rates and UAE's Economic Recovery
Similar to other banks in the UAE and the Gulf region, FAB has benefitted from the surge in interest rates, as most central banks within the GCC peg their currencies to the US dollar and follow the Federal Reserve's interest rate policy. The UAE's economy has shown resilience, rebounding from the Covid-19-induced slowdown with the support of higher oil prices and pandemic mitigation measures. After recording a remarkable 7.9% growth in 2022, the UAE's economy is projected to expand by 3.9% in 2023 and 4.3% in 2024, according to the UAE Central Bank.
Strong Financial Results and Continued Growth
FAB's financial results have been exceptionally strong, with net income for the first half of this year reaching Dh8.1 billion. Excluding gains related to Magnati in the first half of the previous year, the net profit increased by 65% year-on-year on an underlying basis. With a focus on managing risks prudently and enhancing group returns, FAB aims to maintain its strong and resilient profile amid the current high-interest rate environment. The bank's assets, loans, and customer deposits have all shown healthy growth, reinforcing FAB's position as a leading financial institution in the UAE and beyond.
Looking Ahead: Strategic Expansion and Value Creation
In June, FAB completed the merger of Bank Audi Egypt with its Egyptian operations, solidifying its market position in the populous Arab country. As the bank continues to seek growth opportunities, it remains open to potential acquisitions in the Middle East and North Africa, provided they align with its commercial objectives and create value for the bank. By maintaining a laser focus on enhancing group returns and carefully managing risks, FAB aims to position itself for sustained success in the evolving economic landscape.