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First Abu Dhabi Bank records Dh8.4b net profit as H1 revenue surges 16%

UAE’s largest lender's results driven by double-digit growth in interest and non-interest income

First Abu Dhabi Bank (FAB), the UAE’s largest lender, recorded a net profit of Dh8.4 billion and a 16 per cent surge in revenue to Dh15.7 billion, underlining the bank’s consistent growth trajectory.

In a statement, FAB said while profit before tax grew 15 per cent year-on-year to Dh10 billion. Net profit in the second quarter was Dh4.3 billion as operating income rose 14 per cent yoy to Dh 7.8 billion.

The lender said its robust results were driven by double-digit growth across interest and non-interest income sources, helped by strong business momentum, expansion in Net Interest Margin (NIM), and an improved revenue mix, with Non-Funded Income (NFI) contributing 38 per cent to group revenue, up from 35 per cent in H1’23.

With total assets at Dh1.2 trillion as of June-end 2024, FAB reinforced its position as the largest bank in the UAE. Loans, advances and Islamic financing grew 6.0 per cent to Dh 513 billion, reflecting healthy demand and market share gains across key segments and geographies, said the statement.

The lender facilitated additional Dh52 billion in sustainable finance in Q2’24, reaching Dh200 billion or 41 per cent of FAB’s 2030 target.

Hana Al Rostamani, group chief executive officer of FAB, said the bank is reaffirming its position as a leading force in the Mena banking sector, with the group delivering another strong set of results in the second quarter and first half of 2024.

“FAB continues to leverage its international network to capitalise on market opportunities across the globe. The bank is actively building and expanding business corridors in close alignment with national ambitions, reinforcing our international franchise as a foundation for growth and resilience,” said Al Rostamani.

Lars Kramer, group chief financial officer of FAB, said building on a robust first quarter, the bank continued to achieve high returns at scale while driving diversified growth across its franchise and investing strategically in order to create future efficiencies.

“Consistent growth in both interest and non-interest income sources reflect our efforts to enhance cross-sell and deepen client relationships, leveraging our differentiated strengths and international footprint. While lending momentum was healthy year-to-date, we have also benefited from incremental improvements in net interest margins for the fourth consecutive quarter, reflecting dynamic balance sheet management and optimal positioning ahead of a shift in interest rates,” said Kramer.

In the first half of 2024, FAB delivered a return on tangible equity (RoTE) of 17.3 per cent, including 18.1 per cent in Q2 2024, demonstrating the group’s laser focus on shareholder value. Balance sheet fundamentals remained strong through solid asset quality metrics, with a non-performing loans (NPL) ratio of 3.7 per cent, and a strong liquidity profile displayed in a liquidity coverage ratio of 152 per cent. The group’s cost-to-income ratio of 24.4 per cent as of June-end 2024 demonstrated superior operating efficiency.

The bank reported strong performance across all business lines in H1’24, led by Investment banking and global markets with significant increases in operating income of 23 per cent yoy and 26 per cent yoy, respectively. Consumer banking operating income advanced 16 per cent yoy.

“During the first half of 2024, we continued to unlock long-term value through sustainable growth and diversification, strategic partnerships, and enhanced customer experience and service delivery through innovation and future technologies. Our outlook remains anchored in the strong fundamentals of the UAE and Abu Dhabi as a global economic powerhouse and preferred hub for investment, talent, and innovation. We remain on track to meet our 2024 and medium-term guidance, and to deliver sustainable shareholder returns,” the bank statement said.

“With our leading liquidity position and high-quality risk profile, we are upholding very strong fundamentals including a rock-solid capital base, which consolidated further following our Tier 2 bond issuance earlier this month,” it added.