First Abu Dhabi Bank, the UAE’s largest lender by assets, said its 2022 net profit rose 7 per cent to a record on higher interest income and strong performance of its core business as the country's economy expanded at the fastest pace in over a decade.
Net profit attributable to shareholders for the 12-month period to the end of December, surged to Dh13.4 billion ($3.65 billion) from a year earlier, the lender said in a statement on Thursday to the Abu Dhabi Securities Exchange, where its shares are traded.
Operating profit for the period climbed 9 per cent year-on-year to Dh17 billion, while net interest income jumped 23 per cent to Dh14.4 billion.
"2022 was a year of continued strategic diversification and expansion for the UAE and regional economies, which posted their fastest economic growth in a decade. By capitalising on the favourable macroeconomic conditions, FAB has been laying foundations for the future," FAB chairman Sheikh Tahnoon Al Nahyan said.
“In achieving the group’s highest annual revenue and net profit to-date, FAB has strengthened its strategic position to build a future-proof bank.”
The UAE economy is projected to have grown by 7.6 per cent in 2022, driven by a sharp expansion in both oil and non-oil sectors, according to the estimates by the UAE Central Bank.
The economy bounced back strongly in 2021 from the pandemic-driven slowdown and continued growth momentum last year, driven by higher oil prices and lower inflation.
In December, UAE Minister of Economy Abdulla bin Touq said the country’s gross domestic product is expected to have grown by 6.5 per cent.
The net profit of lenders in the six-member economic bloc of GCC will recover this year almost to pre-pandemic levels in 2022, according to S&P Global Ratings.
Stronger economic growth and support measures mean that the cost of risk will return to 100 basis points for the top 45 banks, the ratings agency said. Banks will continue to benefit from the declining cost of staff and smaller branch networks.
FAB's total income grew 10 per cent during the reporting period to almost Dh24 billion.
It included a Dh3.1 billion gain on the sale of the bank's stake in Magnati. FAB sold its shareholding in payments business to New York-listed Brookfield Business Partners in the first quarter of last year.
Net income for the three month period to the end of December, however, dropped to about Dh 2.5 billion, down from Dh3.3 billion for the same period in 2021.
FAB said the slide in quarterly income reflects "prudent provisioning and conservative asset valuations".
Impairment charges for the loan losses for the 12-month period rose by 7 per cent annually to Dh2.8 billion. It includes a Dh1.1 billion charge taken in the fourth quarter.
Operating cost climbed 15 per cent year-on-year to Dh6.7 billion, driven by integration of operations in Egypt. Write-off of legacy systems in fourth quarter as part of our continuing technology transformation strategy, as well as continued investments into the business, also drove costs higher.
"We continued to consolidate and build our presence in priority markets, including in Egypt through FABMisr," Hana Al Rostamani, group chief executive of FAB, said.
"Underlying operating performance across our core businesses was sustained during the fourth quarter despite a more challenging global macroeconomic outlook. This has provided us headroom to further build provision buffers, take a conservative stance on asset valuations and to continue to invest in our technology platform."
FAB remains confident in the "resilience of this region" and it is well placed to "capitalise on the opportunities to drive superior and sustainable shareholder returns in 2023 and beyond", she added.
FAB's total assets grew 11 per cent year-on-year to more than Dh1.1 trillion. Loans and advances rose 12 per cent to Dh460 billion, while customer deposits surged by 14 per cent annually to Dh701 billion.
FAB, which estimates UAE's economy to have grown 6.7 per cent in 2022, expects gross domestic product to expand in 2023, albeit at a more modest rate of 5 per cent, given the global economic deceleration.
"Going into 2023, we anticipate a relatively benign inflation outlook compared to many parts of the world, which should provide welcome stability against the macroeconomic backdrop," the bank said.
Although the broader Gulf will "not be immune to global price pressures and economic slowdown", FAB expects the UAE's economic growth to be "more sustainable as economic diversification continues to evolve".
Separately on Thursday, FAB said it has appointed Lars Kramer as group chief financial officer following the decision of James Burdett, to retire and return home to New Zealand.
THE BIO
Age: 33
Favourite quote: “If you’re going through hell, keep going” Winston Churchill
Favourite breed of dog: All of them. I can’t possibly pick a favourite.
Favourite place in the UAE: The Stray Dogs Centre in Umm Al Quwain. It sounds predictable, but it honestly is my favourite place to spend time. Surrounded by hundreds of dogs that love you - what could possibly be better than that?
Favourite colour: All the colours that dogs come in
Attacks on Egypt’s long rooted Copts
Egypt’s Copts belong to one of the world’s oldest Christian communities, with Mark the Evangelist credited with founding their church around 300 AD. Orthodox Christians account for the overwhelming majority of Christians in Egypt, with the rest mainly made up of Greek Orthodox, Catholics and Anglicans.
The community accounts for some 10 per cent of Egypt’s 100 million people, with the largest concentrations of Christians found in Cairo, Alexandria and the provinces of Minya and Assiut south of Cairo.
Egypt’s Christians have had a somewhat turbulent history in the Muslim majority Arab nation, with the community occasionally suffering outright persecution but generally living in peace with their Muslim compatriots. But radical Muslims who have first emerged in the 1970s have whipped up anti-Christian sentiments, something that has, in turn, led to an upsurge in attacks against their places of worship, church-linked facilities as well as their businesses and homes.
More recently, ISIS has vowed to go after the Christians, claiming responsibility for a series of attacks against churches packed with worshippers starting December 2016.
The discrimination many Christians complain about and the shift towards religious conservatism by many Egyptian Muslims over the last 50 years have forced hundreds of thousands of Christians to migrate, starting new lives in growing communities in places as far afield as Australia, Canada and the United States.
Here is a look at major attacks against Egypt's Coptic Christians in recent years:
November 2: Masked gunmen riding pickup trucks opened fire on three buses carrying pilgrims to the remote desert monastery of St. Samuel the Confessor south of Cairo, killing 7 and wounding about 20. IS claimed responsibility for the attack.
May 26, 2017: Masked militants riding in three all-terrain cars open fire on a bus carrying pilgrims on their way to the Monastery of St. Samuel the Confessor, killing 29 and wounding 22. ISIS claimed responsibility for the attack.
April 2017: Twin attacks by suicide bombers hit churches in the coastal city of Alexandria and the Nile Delta city of Tanta. At least 43 people are killed and scores of worshippers injured in the Palm Sunday attack, which narrowly missed a ceremony presided over by Pope Tawadros II, spiritual leader of Egypt Orthodox Copts, in Alexandria's St. Mark's Cathedral. ISIS claimed responsibility for the attacks.
February 2017: Hundreds of Egyptian Christians flee their homes in the northern part of the Sinai Peninsula, fearing attacks by ISIS. The group's North Sinai affiliate had killed at least seven Coptic Christians in the restive peninsula in less than a month.
December 2016: A bombing at a chapel adjacent to Egypt's main Coptic Christian cathedral in Cairo kills 30 people and wounds dozens during Sunday Mass in one of the deadliest attacks carried out against the religious minority in recent memory. ISIS claimed responsibility.
July 2016: Pope Tawadros II says that since 2013 there were 37 sectarian attacks on Christians in Egypt, nearly one incident a month. A Muslim mob stabs to death a 27-year-old Coptic Christian man, Fam Khalaf, in the central city of Minya over a personal feud.
May 2016: A Muslim mob ransacks and torches seven Christian homes in Minya after rumours spread that a Christian man had an affair with a Muslim woman. The elderly mother of the Christian man was stripped naked and dragged through a street by the mob.
New Year's Eve 2011: A bomb explodes in a Coptic Christian church in Alexandria as worshippers leave after a midnight mass, killing more than 20 people.
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From Europe to the Middle East, economic success brings wealth - and lifestyle diseases
A rise in obesity figures and the need for more public spending is a familiar trend in the developing world as western lifestyles are adopted.
One in five deaths around the world is now caused by bad diet, with obesity the fastest growing global risk. A high body mass index is also the top cause of metabolic diseases relating to death and disability in Kuwait, Qatar and Oman – and second on the list in Bahrain.
In Britain, heart disease, lung cancer and Alzheimer’s remain among the leading causes of death, and people there are spending more time suffering from health problems.
The UK is expected to spend $421.4 billion on healthcare by 2040, up from $239.3 billion in 2014.
And development assistance for health is talking about the financial aid given to governments to support social, environmental development of developing countries.
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Five famous companies founded by teens
There are numerous success stories of teen businesses that were created in college dorm rooms and other modest circumstances. Below are some of the most recognisable names in the industry:
- Facebook: Mark Zuckerberg and his friends started Facebook when he was a 19-year-old Harvard undergraduate.
- Dell: When Michael Dell was an undergraduate student at Texas University in 1984, he started upgrading computers for profit. He starting working full-time on his business when he was 19. Eventually, his company became the Dell Computer Corporation and then Dell Inc.
- Subway: Fred DeLuca opened the first Subway restaurant when he was 17. In 1965, Mr DeLuca needed extra money for college, so he decided to open his own business. Peter Buck, a family friend, lent him $1,000 and together, they opened Pete’s Super Submarines. A few years later, the company was rebranded and called Subway.
- Mashable: In 2005, Pete Cashmore created Mashable in Scotland when he was a teenager. The site was then a technology blog. Over the next few decades, Mr Cashmore has turned Mashable into a global media company.
- Oculus VR: Palmer Luckey founded Oculus VR in June 2012, when he was 19. In August that year, Oculus launched its Kickstarter campaign and raised more than $1 million in three days. Facebook bought Oculus for $2 billion two years later.
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