First Gulf Bank’s defaulting loans are beginning to subside.
First Gulf Bank’s defaulting loans are beginning to subside.

First Gulf Bank profits decline



First Gulf Bank has reported lacklustre earnings for the third quarter but earnings data showed the worst of the bank's problems with defaulting debtors seem to be subsiding.

The fourth-largest bank in the UAE by assets reported a 8.7 per cent decline in net profits to Dh849 million (US$231.1m) compared with the same quarter last year, but bad debts levelled off from the previous quarter.

First Gulf Bank, however, was alone among Abu Dhabi's banks in disclosing a decrease in net profits for the third quarter, after reports of increased profits at National Bank of Abu Dhabi and Abu Dhabi Commercial Bank on Tuesday.

Naresh Bilandani, an analyst at JPMorgan Cazenove, said with defaulting loans under control, profits should soon return.

"Broadly speaking, these guys seem to be on a sound footing," Mr Bilandani said, adding the bank showed "strong underlying trends", such as getting its asset quality "under control".

Bad debts, which account for 2.5 per cent of First Gulf's loan book, showed no change from the previous quarter, although they are up from 1.6 per cent at the start of the year.

"Once asset quality pressure starts easing off the industry starts focusing on new loans," Mr Bilandani said.

Sofia el Boury, a banking analyst at Shuaa Capital, said the bank had managed to achieve "perfect stability" of bad debts from the previous three months, which may indicate its problems with defaulting loans have peaked.

"The strong positive was that the bank was able to stabilise its asset quality. Indicators like the non-performing loans ratio were maintained at a similar level to the second quarter," Ms el Boury said.

"Liquidity is still improving and there's still lending but [it is] very cautious."

Total provisions for bad debts decreased 1.2 per cent to Dh406m, their lowest since bad debts from the troubled property sector peaked in the final months of last year.

Tarik el Mejjad, an analyst at Nomura, said markets would breathe a sigh of relief on that point: "I think everyone was assuming that provisions would start to slow."

Andre Sayegh, the bank's chief executive, said it was looking healthy.

"First Gulf Bank is in a very strong financial position and will maintain its primary objective of maximising value for all its stakeholders," Mr Sayegh said.

"The bank strategy of targeting its ratios resulted in building a solid balance sheet position over the years. We are very proud to state that this combination of ratios is unmatched in the UAE banking industry."

First Gulf built up cash reserves over the past few months, increasing its capital adequacy ratio to 23.4 per cent, the highest of Abu Dhabi's top three banks.

But fears remain about the amount of bad debts across the sector.

"There's still a debt overhang that banks need to grapple with," said Ahmad Alanani, an analyst at Exotix.

Mr Alanani added the booming profits seen before the global downturn began, driven largely by loan growth, were unlikely to return. "The fact of the matter is that lending conditions are tough, and I don't see a catalyst for banks to start lending," he said.

"Non-performing loans are not going to get worse, but I don't think they're going to get better any time soon."

Analysts' median estimate was for expected profits of Dh789.5m for the third quarter, according to data from Bloomberg.

Cryopreservation: A timeline
  1. Keyhole surgery under general anaesthetic
  2. Ovarian tissue surgically removed
  3. Tissue processed in a high-tech facility
  4. Tissue re-implanted at a time of the patient’s choosing
  5. Full hormone production regained within 4-6 months
How to join and use Abu Dhabi’s public libraries

• There are six libraries in Abu Dhabi emirate run by the Department of Culture and Tourism, including one in Al Ain and Al Dhafra.

• Libraries are free to visit and visitors can consult books, use online resources and study there. Most are open from 8am to 8pm on weekdays, closed on Fridays and have variable hours on Saturdays, except for Qasr Al Watan which is open from 10am to 8pm every day.

• In order to borrow books, visitors must join the service by providing a passport photograph, Emirates ID and a refundable deposit of Dh400. Members can borrow five books for three weeks, all of which are renewable up to two times online.

• If users do not wish to pay the fee, they can still use the library’s electronic resources for free by simply registering on the website. Once registered, a username and password is provided, allowing remote access.

• For more information visit the library network's website.

Other workplace saving schemes
  • The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
  • Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
  • National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
  • In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
  • Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
Dubai Bling season three

Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed 

Rating: 1/5

Emergency

Director: Kangana Ranaut

Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry 

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FFP EXPLAINED

What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.

What the rules dictate? 
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.

What are the penalties? 
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.

World Series

Game 1: Red Sox 8, Dodgers 4
Game 2: Red Sox 4, Dodgers 2
Game 3: Saturday (UAE)

* if needed

Game 4: Sunday
Game 5: Monday
Game 6: Wednesday
Game 7: Thursday

COMPANY%20PROFILE
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COMPANY PROFILE
Name: HyperSpace
 
Started: 2020
 
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
 
Based: Dubai, UAE
 
Sector: Entertainment 
 
Number of staff: 210 
 
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
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Scoreline

Real Madrid 1
Ronaldo (53')

Atletico Madrid 1
Griezmann (57')

How to protect yourself when air quality drops

Install an air filter in your home.

Close your windows and turn on the AC.

Shower or bath after being outside.

Wear a face mask.

Stay indoors when conditions are particularly poor.

If driving, turn your engine off when stationary.

COMPANY%20PROFILE
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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.

Director: Laxman Utekar

Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna

Rating: 1/5

Fixtures:

Wed Aug 29 – Malaysia v Hong Kong, Nepal v Oman, UAE v Singapore
Thu Aug 30 - UAE v Nepal, Hong Kong v Singapore, Malaysia v Oman
Sat Sep 1 - UAE v Hong Kong, Oman v Singapore, Malaysia v Nepal
Sun Sep 2 – Hong Kong v Oman, Malaysia v UAE, Nepal v Singapore
Tue Sep 4 - Malaysia v Singapore, UAE v Oman, Nepal v Hong Kong
Thu Sep 6 – Final