HomeBanking & FinanceUAE’s National Bank of Fujairah records 155.1% surge in net profit
By Economy Middle East
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October 27, 2022 10:53 am

UAE’s National Bank of Fujairah records 155.1% surge in net profit

Resilient performance supported by strong capital adequacy
NBF
NBF

UAE’s National Bank of Fujairah (NBF) recorded year-on-year growth of 155.1% to close the nine-month period at a net profit of  230.7 million dirhams compared to 90.4 million dirhams in the corresponding period of 2021, up 463.4 percent for the three month period ended 30 September 2022 over the same period of 2021.

Underpinned by higher net interest income and net income from Islamic financing and investment activities, fee and exchange income, NBF posted an operating profit of 932.5 million dirhams for the nine-month period, a rise of 25.1% compared to 745.4 million dirhams in the corresponding period of 2021 and up 2.4% quarter-on-quarter and 32.9% for the same period. 

Additionally, operating income growth of 28.1% was recorded and 3.5% compared to Q2 2022. Operating income reached 1.32 billion dirhams, up 21.7% compared to 1.1 billion dirhams in 2021, reflecting the rising interest rate environment and improved fee income in line with the bank’s cautious recovery strategy. 

Net interest income and net income from Islamic financing and investment activities grew 20.6% to 855.4 million dirhams for 2022 compared to 709.3 million dirhams in 2021. It was up 39.6% compared to 2021 and up 19.1% compared to Q2 2022.

Net fees, commission, and other income rose 20.2% to 302.7 million dirhams for 2022 2022 compared to 251.8 million dirhams in 2021. 

NBF posted a record foreign exchange and derivatives income of 142.5 million dirhams for 2022, with an exceptional growth of 73.9% compared to 82 million dirhams in 2021. 

Income from investments and Islamic instruments stood at 19.2 million dirhams compared to 41.6 million dirhams in 2021. 

Operating expenses increased by 14.2%. These investments include a set of digitalization initiatives to enhance our focus on exceptional customer service through digital adoption and innovation. 

Loans and advances and Islamic financing receivables rose by 7.7% to reach 27.6 billion dirhams compared to 25.6 billion dirhams at 2021 year-end, up by 8.5% from 30 September 2021.

Investments and Islamic instruments increased by 35.3% from 4.4 billion dirhams at 2021 year-end to 5.9 billion dirhams until 30 September 2022, up by 29.2% from 30 September 2021 evidencing the deployment of a portion of excess liquidity towards the high-quality investment book to augment shareholder value.

The capital adequacy ratio (CAR) stood at 18.0% (Tier 1 ratio of 16.8% and CET 1 ratio of 13.1%) compared to 19.1% (Tier 1 ratio of 18.0% and CET 1 ratio of 13.8%) at 2021 year-end and is being maintained at this heightened level to support the bank’s ability to ride out any challenges arising out of the rapidly evolving operating landscape. 

Customer and Islamic customer deposits rose by 1.6% to reach 32.7 billion dirhams compared to 32.2 billion dirhams at 2021 year-end, up by 10.7% from 30 September 2021. Current and Saving Accounts (CASA) deposits increased by 265.0 million dirhams from 2021 year-end, a 1.7% increase to 15.7 billion dirhams until 30 September 2022 and up 16.7% from 30 September 2021. CASA deposits improved to a record 47.9% of total customer deposits until 30 September 2022 softening the impact pertinent to the cost of deposits.

Total assets rose by 3.3% to reach 44.4 billion dirhams compared to 42.9 billion dirhams at 2021 year-end, up by 8.9% from 30 September 2021.

Moreover, ample liquidity has been maintained with lending to stable resources ratios at 78.8% (2021: 76.5%) and eligible liquid assets ratio (ELAR) at 16.0% (2021: 26.2%), well ahead of the Central Bank of the UAE’s minimum requirements.