UAE's largest lender FAB posts 29% jump in second-quarter profit on revenue boost

Net profit for three-month period exceeds $1.5 billion

First Abu Dhabi Bank is progressing with plans to expand its international footprint. Antonie Robertson/The National

First Abu Dhabi Bank, the UAE’s largest lender by assets, reported a 29 per cent annual increase in its second-quarter net profit on diversified revenue growth.

Net profit attributable to share holders for the three months to the end of June climbed to Dh5.51 billion ($1.5 billion), the lender said on Wednesday in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

Net interest income during the quarter rose to Dh4.37 billion, while net fee and commission income increased to Dh1.1 billion. Net income from Islamic financing and investing products also increased by more than 11 per cent to Dh576 million during the period.

“We achieved broad-based growth with all divisions delivering double-digit revenue expansion,” said FAB group chief financial officer Lars Kramer.

“With robust capital, liquidity and funding buffers, and a high-quality risk profile, FAB remains well positioned to navigate evolving market conditions.”

Group chief executive Hana Al Rostamani added that the lender is “progressing plans” to expand its international footprint.

FAB, created through the merger of the National Bank of Abu Dhabi and First Gulf Bank in 2017, has been pursuing acquisitions in the broader Middle East and North Africa 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 of more than $10 billion.

FAB is progressing plans to expand its international footprint

Hana Al Rostamani,
group chief executive

FAB also offered to acquire 51 per cent of EFG Hermes, Egypt’s largest investment bank, in February 2022. However, it withdrew the offer two months due to “global market uncertainty and volatile macroeconomic conditions”.

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, Ms Al Rostamani told The National in 2023.

The bank's growth comes as the UAE economy continues to expand on the back of diversification efforts.

The UAE’s economy grew by 4 per cent last year, driven by a strong expansion in its non-oil sector, with real gross domestic product reaching Dh1.776 trillion, the Ministry of Economy said last month.

The UAE Central Bank expects real GDP to expand by 4.4 per cent in 2025 and increase to 5.4 per cent in 2026.

For the first half of this year, FAB reported a 26 per cent rise in net profit to Dh10.63 billion, surpassing the Dh10 billion mark for the first time in a half-year period.

This was driven by “broad-based growth and strong business activity on the back of an expanding client base, diversified growth across key economic sectors, and a rise in customer acquisitions”, the statement said.

Loans, advances and Islamic financing rose 7 per cent year-to-date to Dh568 billion, while customer deposits increased 4 per cent to Dh813 billion, according to the statement.

The bank’s non-performing loan ratio improved to 2.84 per cent in the same period.

Total assets climbed nearly 11 per cent year-to-date to Dh1.3 trillion.