National Bank of Fujairah said on Wednesday that its fourth-quarter profit fell by 33.8 per cent as the money set aside to cover bad debt more than doubled amid continuing financial stress related to the drop in oil prices.
Net profit fell to Dh70 million in the last three months of the year compared with Dh105m in the corresponding period of 2015, the bank said. Provisions rose by 114 per cent to Dh162m from Dh76m in the last three months of 2015.
Despite those losses, the bank said operating income rose by 15.1 per cent in the period, bolstered by gains in the lender’s core businesses.
Net interest income and net income from Islamic financing and investment activities advanced by 8.9 per cent in the fourth quarter to Dh218m compared with Dh200m in the corresponding period of 2015.
Meanwhile, net non-interest income rose by 27.7 per cent to Dh126m from Dh99m during the same time frame.
“The bank’s performance reflects the continuing focus on core business growth, proactive asset and liability management and disciplined cost management,” said Vince Cook, the bank’s chief executive.
“The robust operating performance enabled the bank to absorb the impact heightened by credit stress in the market, by making prudent provisions.”
The dramatic drop in the price of oil, which has lost as much as 70 per cent of its value since it began its decline in the summer of 2014, has reduced demand for loans and increased the level of debt defaults.
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