NBF’s nine-month net profit jumps 155.1%
- Resilient performance supported by strong capital adequacy, solid improvement in asset quality and strong balance sheet management
NBF is pleased to announce today its results for the nine months ended September 30, 2022.
- NBF recorded year-on-year growth of 155.1% to end the nine-month period with a net profit of AED230.7 million compared to AED90.4 million for the corresponding period of 2021, up by 463.4% for the three-month period ended September 30, 2022 over the corresponding period of 2021. This demonstrates NBF’s increased focus on quality business, an effective funding base, continued economic recovery and improving resilience despite the uncertain geopolitical environment.
- Supported by higher net interest income and net income from Islamic financing and investment activities, fee income and foreign exchange, NBF recorded an operating profit of AED 932.5 million for the nine-month period, an increase of 25.1% compared to AED 745.4 million for the corresponding period. 2021 and up 2.4% quarter on quarter and 32.9% for the three-month period ended September 30, 2022 compared to the corresponding period of 2021.
- Operating income growth of 28.1% was recorded for the three-month period ended September 30, 2022 compared to the corresponding period of 2021; and 3.5% compared to Q2 2022. Operating profit reached AED 1.32 billion for the nine months ended September 30, 2022, up 21.7% from AED 1.1 billion for the corresponding period of 2021, reflecting higher interest rates and improved fee income in line with the bank’s prudent recovery strategy.
- Net interest income and net income from Islamic financing and investment activities increased by 20.6% to AED855.4 million for the nine-month period ended September 30, 2022, from AED709. AED 3 million for the corresponding period of 2021. It increased by 39.6% for the three-month period. ended September 30, 2022 compared to the corresponding period of 2021; and up 19.1% compared to Q2 2022.
- Net fees, commissions and other income increased by 20.2% to reach AED302.7 million for the nine-month period ended September 30, 2022, compared to AED251.8 million for the corresponding period of 2021. They increased 3.1% for the three-month period ended September 30, 2022 compared to the corresponding period of 2021.
- NBF posted record foreign exchange and derivatives revenue of AED142.5 million for the nine-month period ended September 30, 2022, with an exceptional growth of 73.9% from AED82.0 million AED for the corresponding period of 2021. It increased by 45.9% for the three-month period ended September 30, 2022 compared to the corresponding period of 2021.
- Income from Islamic investments and instruments amounted to AED 19.2 million compared to AED 41.6 million for the corresponding period of 2021.
- Operating expenses increased by 14.2%, reflecting NBF’s investments in its businesses, systems, infrastructure and people. These investments include a set of digitization initiatives aimed at strengthening our focus on exceptional customer service through digital adoption and innovation. Nonetheless, NBF’s cost-to-income ratio improved to 29.4% from 31.3% for the corresponding period of 2021, after achieving further improvements in productivity. This provides ample flexibility to continue investing in our technology capabilities and improving the customer experience.
- NBF maintained its policy of careful and transparent recognition of problematic accounts. The group’s small number of exceptional exposures that needed to be resolved are progressing well, in line with the bank’s recovery strategy. NBF obtained net impairment provisions of AED 701.8 million for the nine-month period ended September 30, 2022, compared to AED 654.9 million for the corresponding period of 2021. During the period, the impairment reserve of the bank was reduced by 11.2% to AED 168.5 million from AED 189.7. million euros as of December 31, 2021. The coverage ratio of total provisions (including provisions for impairment) improved to 113.4% from 87.0% as of December 31, 2021. The NPL ratio improved at 7.8% compared to 9.8% as of December 31, 2021 and at the IFRS 9 stage 2 stood at 7.0% compared to 6.1% as of December 31, 2021. Excluding a few exceptional group exposures, the NPL ratio would be reduced at 4.5% (31 December 2021: 5.5%).
- Loans and advances and Islamic financing receivables increased by 7.7% to reach AED 27.6 billion from AED 25.6 billion at the end of 2021, up 8.5% compared to September 30, 2021.
- Islamic investments and instruments increased by 35.3% from AED4.4 billion at the end of 2021 to AED5.9 billion as of September 30, 2022, up by 29.2 % compared to September 30, 2021, reflecting the deployment of some excess liquidity to the high quality investment portfolio. to increase shareholder value.
- The solvency ratio (CAR) stood at 18.0% (Tier 1 ratio of 16.8% and CET 1 ratio of 13.1%) against 19.1% (Tier 1 ratio of 18.0% and CET 1 of 13.8%) at the end of 2021 and is maintained at this high level to support the bank’s ability to meet all challenges arising from the rapidly changing operating landscape.
- Customer deposits and Islamic customer deposits increased by 1.6% to reach AED32.7 billion from AED32.2 billion at the end of 2021, up 10.7% compared to September 30, 2021. Current and Savings Accounts (CASA) deposits increased by AED 265.0 million compared to 2021 year-end, an increase of 1.7% to reach 15.7 billion AED as of September 30, 2022 and 16.7% from September 30, 2021. CASA deposits improved to a record 47.9% of total customer deposits as of September 30, 2022, mitigating the relevant impact on the cost of deposits.
- Total assets increased by 3.3% to reach AED 44.4 billion from AED 42.9 billion at the end of 2021, up 8.9% from September 30, 2021.
- Abundant liquidity was maintained with loan-to-fund ratios stable at 78.8% (2021: 76.5%) and eligible liquid asset ratio (ELAR) at 16.0% (2021: 26.2%) , well ahead of the UAE Central Bank’s minimum requirements.
- Return on average assets improved to 0.7% from 0.3% for the corresponding period in 2021.
- Return on average equity improved to 5.4% from 2.1% for the corresponding period in 2021.
Dr. Raja Easa Al Gurg, Vice President, said:
“We are pleased with these encouraging results which demonstrate the continued impact of our business and operational strategy, with positive revenue momentum and solid improvement in asset quality. Good growth in our operating and net performance bodes well for the full year results and beyond, despite continued macroeconomic uncertainty.
Propelled by a strong recovery in business activities, a buoyant real estate sector and a booming hotel sector following an easing of travel restrictions, the UAE is consolidating its position to achieve its fastest annual economic growth since more than a decade in 2022. In this positive market dynamic, NBF is armed and well placed to adapt the growth of its activity.
The Group maintained a strong capital position and healthy balance sheet to confidently navigate the changing operating environment for improved long-term sustainable returns. We are also pleased to see the growing market recognition during the quarter; where FBN was awarded the “Best Cyber Insurance and Resilience Capabilities” award at the Wealth and Investment Summit 2022 organized by MEA Finance. NBF will continue to maintain the highest standards of compliance and risk management practices based on new regulatory changes, digitization initiatives, and information and cybersecurity requirements.
Going forward, NBF will continue to tap into new, quality business opportunities keeping in mind the booming oil sector that will drive the UAE’s accelerated economic growth in 2022; while a strong non-oil sector will provide further impetus through the government’s reform program. In addition, the bank continues to make progress with a number of important initiatives and maintains an increased focus on environmental, social and governance aspects. [ESG] activities that remain fundamental to the FBN franchise for a sustainable future.
About National Bank of Fujairah PJSC:
Incorporated in 1982, National Bank of Fujairah PJSC (NBF) is a full-service corporate bank with strong expertise in corporate and commercial banking, treasury and trade finance, as well as a growing range of personal banking options and Sharia-compliant services. Leveraging its deep banking experience and market knowledge in Fujairah and the UAE, NBF is well placed to build lasting relationships with its clients and help them achieve their business goals.
The main shareholders of NBF are the Government of Fujairah, Easa Saleh Al Gurg LLC and Investment Corporation of Dubai. Rated Baa1/Prime-2 for deposits and A3 for counterparty risk assessment by Moody’s and BBB/A-2 by Standard & Poor’s, both with a stable outlook, the bank is listed on the Abu Dhabi Stock Exchange under the symbol “NBF”. It has a branch network of 15 (of which 1 is an electronic banking unit) across the UAE.
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