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UAE's largest bank hits Dh4.2 billion net profit in Q1; revenue reaches Dh8 billion

The Abu Dhabi-based bank continues to maintain strong liquidity and robust operational efficiencies

First Abu Dhabi Bank (FAB), the UAE’s largest bank, reported a net profit of Dh4.2 billion for the first quarter of 2024, up 6 per cent year-on-year.

The bank’s revenue grew 18 per cent year-on-year to Dh8 billion, propelled by core operational growth, balance sheet expansion, higher net interest margin (NIM), and robust non-funded income (NFI). The contribution of non-interest income to group revenue grew to 39 per cent.

FAB solidified its position as the largest bank in the country and the second largest bank in the Gulf region with total assets at Dh1.24 trillion, loans at Dh508 billion and deposits at Dh803 billion.

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Hana Al Rostamani, Group CEO of FAB, noted the bank continues to deliver robust performance, reflected in double-digit growth in revenue year-on-year, supported by a strong business momentum.

“This further strengthens our fundamentals, including our total asset base crossing the Dh1.2 trillion threshold. We remain focused on accelerating our growth strategy, building efficiencies and delivering sustained shareholder value,” Al Rostamani said.

“In 2024, we continue to demonstrate the same strengths that led to our exceptional performance in 2023, with growth in profits and revenues, backed by operational efficiencies and financial resilience,” Al Rostamani underlined.

Lars Kramer, group chief financial officer of FAB, noted the double-digit revenue growth largely offset the impact of the recently implemented UAE corporate tax.

“The growth in non-funded income, in particular, is pleasing as we continue to leverage our region-leading capabilities, diversified business model and sophisticated global markets platform to further deepen client relationships. The strong revenue growth also enabled us to largely offset the impact of the UAE corporate tax and to maintain robust provision coverage levels, particularly in the context of a global environment marked by continued uncertainties.”

FAB continues to maintain strong liquidity and robust operational efficiencies, highlighted in its 24 per cent cost-to-income ratio.

“We have achieved our stellar Q1 performance while maintaining a strong balance sheet, rock-solid capital base, leading liquidity position, and high-quality risk profile. We continued to make excellent progress against our sustainability agenda with the issuance of the first-ever social bonds from the UAE. We remain committed to delivering above 16 per cent return on tangible equity (RoTE) over the medium term, as evidenced by our Q1 outcome of 17.4 per cent,” Kramer said.

Building on 2023 momentum

FAB continued to deliver diversified revenue growth across the bank’s businesses and strategic global footprint. Investment banking revenue grew 26 per cent year-on-year to Dh2.8 billion; corporate and commercial banking revenue increased 6 per cent year-on-year to Dh1.8 billion; global markets revenue grew 29 per cent year-on-year to Dh1.9 billion; consumer banking revenue increased 37 per cent year-on-year to Dh1.1 billion; and global private banking revenue advanced 12 per cent year-on-year to Dh308 million. Revenue from local operations accelerated 14 per cent year-on-year to Dh5.9 billion and international operations 33 per cent year-on-year to Dh2 billion.

“We keep our customers and clients at the centre of everything we do, integrating cutting-edge technology and innovation, diversification, and financial sustainability, as we respond to the rapidly evolving needs of regional and international markets,” Al Rostamani underlined.

As the regional pacesetter bank in sustainability, FAB facilitated Dh26 billion in new sustainable finance in Q1. The bank has to date exceeded Dh150 billion or 30 per cent of its target to lend, invest and facilitate more than Dh500 billion in sustainable and transition financing by 2030.

The bank launched a beta version of its ‘Knowledge Brain’ platform developed with customised generative AI, designed to democratise knowledge access, boost productivity and decision-making across the group. It initiated the development of its GenAI framework, enabling secure and expedited deployment of AI in enterprise settings and fostering innovation while upholding stringent security standards.

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