- Strong capital adequacy, healthy liquidity and improving asset quality contributed to improved shareholder value
NBF is pleased to announce today its results for the three-month period ended March 31, 2022.
Strong points:
- NBF recorded year-on-year growth of 43.7% to end the three-month period with a net profit of AED60.4 million compared to AED42.0 million for the corresponding period of 2021 and up 143.3% compared to the fourth quarter of 2021. This demonstrates the solidity of the bank. recovery and focus on core business, exceptional customer service, an increased level of resilience, and proactive asset and liability management.
- Supported by higher commission, foreign exchange and investment income, NBF posted an operating profit of AED293.2 million for the three-month period, up 18.2% from AED248.1 million for the corresponding period of 2021 and up 39.5% quarter-on-quarter. . This is due to improved underlying business momentum and improved balance sheet management despite the current volatile environment and recent geopolitical conditions.
- Operating income reached AED412.8 million, up 14.6% from AED360.2 million in the corresponding period of 2021 and up 15.5% from the fourth quarter of 2021, reflecting the trend of gradual recovery and in line with the bank’s strategy which focuses primarily on financial stability.
- Net interest income and net income from Islamic financing and investment activities up 4.8% and net fees, commissions and other income up 35.0% compared to the corresponding period 2021, reaching AED 238.6 million and AED 105.8 million respectively; and grew by 2.9% and 14.3% respectively compared to Q4 2021.
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- Foreign exchange and derivatives revenue recorded a good growth of 52.3% to AED 47.1 million compared to AED 30.9 million for the corresponding period of 2021 and 46.0% compared to the fourth quarter of 2021.
- Income from Islamic investments and instruments amounted to AED21.4 million compared to AED23.4 million for the corresponding period of 2021.
- Operating expenses increased by 6.6%, reflecting NBF’s new investments in its operations, systems and infrastructure. These investments include a set of digitization initiatives aimed at strengthening our focus on exceptional customer service through digital adoption and innovation. The cost/income ratio improved to 29.0% from 31.1% for the corresponding period of 2021, showing the productivity improvements made to date and providing headroom to continue investing in our technology capabilities.
- NBF maintained its policy of careful and transparent recognition of problematic accounts. The group’s small number of exceptional exposures that needed to be resolved are progressing in line with the bank’s recovery strategy. NBF obtained net impairment provisions of AED232.9 million for the three-month period ended March 31, 2022, compared to AED206.1 million for the corresponding period of 2021. During the period, the impairment reserve of the bank decreased slightly by 0.2% to reach AED 189.2 million against AED. 189.7 million as of December 31, 2021. The total provisions coverage ratio (including provisions for impairment) improved to 94.5% from 87.0% as of December 31, 2021. The NPL ratio improved to 9.1% compared to 9.8% as of December 31, 2021 and IFRS 9 exposure in phase 2 improved to 5.8% compared to 6.1% as of December 31, 2021. Excluding the group’s few exceptional exposures, the NPL ratio would decrease to 5.1% (31 December 2021: 5.5%).
- The solvency ratio (CAR) stood at 18.7% (Tier 1 ratio of 17.5% and CET 1 ratio of 13.5%) against 19.1% (Tier 1 ratio of 18.0% and CET 1 of 13.8%) at the end of 2021 and is maintained at this level to support the bank’s ability to meet all challenges arising from the rapidly changing operational landscape.
- Loans and advances and Islamic financing receivables grew by 6.2% to reach AED27.2 billion from AED25.6 billion at the end of 2021, up 8.7% compared to March 31, 2021.
- Investments and Islamic instruments amounted to AED 3.6 billion compared to AED 4.4 billion at the end of 2021 and AED 5.0 billion as of March 31, 2021.
- Customer deposits and Islamic customer deposits stood at AED32.17 billion compared to AED32.20 billion at the end of 2021, up 13.6% from March 31 2021. Current and Savings Accounts (CASA) deposits increased by AED 415.0 million compared to the end of 2021, an increase of 2.7% to reach AED 15.8 billion AED as of March 31, 2022. CASA deposits improved to a record 49.2% of total customer deposits, from 47.9% as of December 31, 2021 and 39.8% as of March 31, 2021, mitigating the impact of the current drop in interest rates.
- Total assets reached AED42.6 billion from AED42.9 billion at the end of 2021, up 8.9% from March 31, 2021.
- Abundant liquidity was maintained with stable loan-to-resource ratios at 81.3% (2021: 76.5%) and eligible liquid assets ratio (ELAR) at 19.1% (2021: 26.2%) , well above all CBUAE minimum requirements.
- Return on average assets improved to 0.6% from 0.4% for the corresponding period in 2021.
- Return on average equity improved to 4.2% from 3.0% for the corresponding period in 2021.
Dr. Raja Easa Al Gurg, Vice President, said:
“We are delighted to see an encouraging start to 2022 with a series of promising first quarter results, helped by the economic recovery from the pandemic. improvement in asset quality in line with our strategy.
Although the evolving global landscape is dominated by significant geopolitical tensions, volatility and turmoil, the UAE has made steady progress and the economic outlook shows positive signs of sustained recovery. The United Arab Emirates achieved GDP growth of 3.8% in 2021; and is expected to see economic growth of 4.2% this year despite growing inflationary pressures, according to the Central Bank of the United Arab Emirates.
With air travel rebounding, the real estate sector on an upward trajectory and oil prices still high, NBF is well positioned to take advantage of the growth that is expected to continue for some time to come.
The Group’s resilient financial performance underlines its ability to navigate a changing environment, aided by its strong capital and liquidity position. Credit growth has performed well thanks to efficient liquidity deployment and the balance sheet remains well diversified and solidly positioned. The franchise’s success in leveraging technology and its growing capabilities in digital innovation continue to take customer service to new levels – an important strategic priority for NBF.
With this gradual start to 2022 and our best quarter since emerging from the impact of the pandemic, we are confident that the FBN franchise will continue to perform with excellence throughout the year. We look forward to exploiting new business opportunities, including taking advantage of the new opportunities offered by digitalization and obviously playing our part in the development of the UAE economy, coupled with greater consideration for the environment, social and governance. [ESG] issues.”
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About National Bank of Fujairah PJSC:
Incorporated in 1982, National Bank of Fujairah PJSC (NBF) is a full-service corporate bank with strong expertise in corporate and commercial banking, treasury and trade finance, as well as a growing range of personal banking options and Sharia-compliant services. Leveraging its deep banking experience and market knowledge in Fujairah and the UAE, NBF is well placed to build lasting relationships with its clients and help them achieve their business goals.
The main shareholders of NBF are the Government of Fujairah, Easa Saleh Al Gurg LLC and Investment Corporation of Dubai. Rated Baa1/Prime-2 for deposits and A3 for counterparty risk assessment by Moody’s and BBB/A-2 by Standard & Poor’s, both with a stable outlook, the bank is listed on the Abu Dhabi Stock Exchange under the symbol “NBF”. It has a branch network of 15 (of which 1 is an electronic banking unit) across the UAE.
For more information, please contact:
Strategic Marketing and Communication Department
Email: [email protected]
