Monday, Oct 27, 2014
By Asa Fitch
DUBAI--Abu Dhabi's First Gulf Bank reported a 20% year-on-year rise in third-quarter net profit on Monday, boosted by an increase in operating income and a fall in impairments for bad loans.
FGB made a net profit of 1.43 billion U.A.E. dirhams ($388 million) in the third quarter, beating most analysts' forecasts. Cairo's EFG Hermes predicted a AED1.38 billion net profit, while Kuwait's Global Investment House projected AED1.36 billion.
Boosting the results were a 13% year-on-year rise in operating income, coupled with a decline in provisions set aside for loan defaults. Many banks in the U.A.E. have seen a decrease in loan-book impairments and better top-line growth as the country's economy rebounds from the global recession.
Non-performing loans were 2.7% of overall loans at the end of the quarter, down from 3.9% in the third quarter of last year, the bank said in a statement, a metric that "clearly indicates the recovery and strength of the U.A.E. economic environment."
FGB's net profit was its highest ever in a single quarter, it said. Chief Executive Andre Sayegh said the bank was "on the right track to achieve another record performance" looking to the end of the year.
Like many U.A.E. banks, FGB has ramped up lending in recent quarters to profit from the local recovery. During the third quarter, the bank's loan book grew by 4% to reach AED132.7 billion. Deposits also increased by 5% during the quarter, it said.
Moving forward, FGB is looking to grow its business organically through diversification of revenue sources, Managing Director Abdulhamid Saeed said. The bank has expanded its presence in Asia in recent years and opened a representative office in London to serve clients doing business there.
Write to Asa Fitch at asa.fitch@wsj.com
(END) Dow Jones Newswires
27-10-14 1254GMT
