• Home
• /
• Finance
• /
• Business

NBF records best-ever operating performance in 2022

Fujairah lender’s net profit recorded 195.3 per cent year-on-year growth at Dh340.4 million last year due to a solid turnaround supported by robust capital adequacy and sound improvement in asset quality

National Bank of Fujairah (NBF) on Wednesday announced that its operating income surged 25.8 per cent to Dh1.8 billion last year while operating profit climbed 29.4 per cent to Dh1.2 billion due to a solid turnaround supported by robust capital adequacy and sound improvement in asset quality.

In a statement, the Fujairah-based lender, which was incorporated in 1982, said its net profit recorded 195.3 per cent year-on-year growth at Dh340.4 million last year compared to Dh115.2 million in 2021.

“This reflects the bank’s long-standing customer centric approach, good quality business growth and enhanced balance sheet management supported by the impressive local economic recovery despite an uncertain global geopolitical environment,” the statement said.

“Our record 2022 operating performance was testament to the robustness of our business model and operational strategy. Despite a year marked by volatile geopolitical conditions, record inflation and climate-linked disasters, we were sufficiently resilient to adapt to the emerging conditions and record strong growth,” Sheikh Saleh bin Mohamed bin Hamad Al Sharqi, chairman, NBF, said.

“We increased operating income by 25.8 per cent to Dh1.8 billion, the highest in our 40-year history. Likewise, operating profit increased by 29.4 per cent to Dh1.2 billion. This demonstrates the adaptability of the NBF franchise to navigate through the rapidly-changing environment effectively to emerge stronger than ever,” he said.

The bank’s highest-ever operating profit was underpinned by higher net interest income and net income from Islamic financing and investment activities, fee and exchange income. Its best-ever operating income reflected the robust core business performance and asset and liability management in a rising interest rate environment.

Record foreign exchange income

NBF posted record foreign exchange and derivatives income of Dh181.4 million, with a growth of 58.8 per cent compared to Dh114.2 million in 2021. Income from investments and Islamic instruments stood at Dh18.8 million compared to Dh42.3 million in 2021.

The bank further said its net interest income and net income from Islamic financing and investment activities grew 29.8 per cent to Dh1.2 billion last year from Dh941.1 million in 2021. Net fees, commission and other income rose 14.2 per cent to Dh393.3 million compared to Dh344.3 million in 2021, it said.

“Our performance this year has been strong and praiseworthy facilitated by the pace of economic recovery of the country. NBF progressed well in the execution of its strategic plans supported by a robust capital adequacy, sound improvement in asset quality, success in leveraging technology and a well-diversified balance sheet resulting in a solid turnaround,” Dr Raja Easa Al Gurg, deputy chairperson, NBF, said.

“Despite the mild recessionary pressures forecast for 2023, we look forward to another successful year for the Group and remain committed to performing our role in the progress of the UAE economy.”

Operating expenses rise

The bank said its operating expenses increased by 18.9 per cent, reflecting NBF’s investments in its businesses, systems, infrastructure and people. These investments include a set of digitalisation initiatives to further enhance the bank’s focus on exceptional customer service through digital adoption and innovation.

NBF also secured net impairment provisions of Dh896 million for the year ended December 31, 2022 compared to Dh840.4 million in 2021. During the year, the bank’s impairment reserve reduced by 11.3 per cent to Dh168.2 million compared to Dh189.7 million as at December 31, 2021.

Customer deposits surge

Customer deposits and Islamic customer deposits rose by 11 per cent to reach Dh35.7 billion last year compared to Dh32.2 billion at 2021 year-end. Current and saving accounts (Casa) deposits increased by Dh760.2 million from 2021 year-end, a 4.9 per cent increase to Dh16.2 billion as at December 31, 2022. Casa deposits improved to 45.3 per cent of total customer deposits as at December 31, 2022 softening the impact of increasing rates for fixed term products on deposit costs.

The bank’s total assets rose by 10.9 per cent to reach Dh47.6 billion in 2022 compared to Dh42.9 billion at 2021 year-end.

“We look forward to a fruitful year ahead and will embrace 2023 with vigour to achieve the very best,” the chairman said.

— muzaffarrizvi@khaleejtimes.com