FAB posts third-quarter profit rise on international revenue boost

Bank's net profit increased by 5 per cent to $1.2bn during the three month period

First Abu Dhabi Bank's net fee and commission income surged 40.5 per cent to Dh1 billion. The National

First Abu Dhabi Bank, the UAE's largest lender by assets, reported a nearly 5 per cent annual increase in its third-quarter net profit on rising international revenue growth.

Net profit for the three months to the end of September climbed to Dh4.46 billion ($1.2 billion), the lender said on Friday in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

Net interest income during the quarter rose about 5 per cent annually to Dh4.3 billion, while net fee and commission income surged 40.5 per cent to Dh1 billion. Net income from Islamic financing and investing products also increased by nearly 26 per cent during the period.

The bank reported a 12 per cent revenue growth in the UAE and 33 per cent revenue growth from its international franchise, which now represents 22 per cent of the group’s total, “with further increases in both assets and liabilities”, it said in a statement.

“Strong business momentum supported by robust economic conditions were reflected in volume growth, rising revenues and diversified income streams, as we continue to leverage our diversified franchise to deepen client relationships,” Lars Kramer, group chief financial officer of FAB, said.

“Our international franchise, in particular, has played an important role in delivering diversified sources of growth.”

FAB, created through the merger of the National Bank of Abu Dhabi and First Gulf Bank in 2017, has actively been pursuing acquisitions in the broader Mena region for the past few years.

In June 2022, FAB completed the merger of Bank Audi Egypt with its Egyptian operations, consolidating its market position in the most populous Arab country. The combined entity, which operates as FABMISR, is one of the largest foreign banks in the Egyptian market, with assets in excess of $10 billion.

FAB also offered to acquire 51 per cent of the issued shares of EFG Hermes, Egypt’s largest investment bank, in February 2022. However, it withdrew the offer in April the same year, due to “global market uncertainty and volatile macroeconomic conditions”, FAB said in a statement at the time.

The lender is open to acquisition opportunities in the Mena region and in markets beyond as long as the deals make commercial sense and create value, its chief executive Hana Al Rostamani told The National last year.

The bank's growth also comes as the UAE's economy continues to grow amid diversification efforts. The UAE Central Bank last month revised its 2024 gross domestic product forecast to 4 per cent, from its June estimate of 3.9 per cent, on the back of non-oil sector growth.

Growth will also be supported by global economic agreements, the regulator said in its quarterly economic review report in September.

The Arab world’s second-largest economy reported a record Dh1.4 trillion in non-oil foreign trade in the first six months of this year amid new comprehensive economic partnership agreements, according to official figures.

FAB's loans, advances and Islamic financing during the three-month period grew 10 per cent annually to Dh528 billion, while customer deposits grew 4 per cent year-on-year to Dh820 billion, according to the statement. Total assets climbed 4 per cent to Dh1.2 trillion.