Tuesday, Apr 24, 2012
Gulf News
Abu Dhabi First Gulf Bank (FGB) reported a seven per cent increase in net profits to Dh935 million during the first quarter compared to the same period in 2011.
Total shareholders’ equity stood at Dh26 billion, and the capital adequacy ratio was 21.2 per cent. The earnings per share for the first three months of 2012 at Dh0.30 was 11 per cent higher than Dh0.27 for the same period last year.
FGB ended the quarter with a cost to income ratio of 19.4 per cent, by far the lowest in the UAE banking industry. The group expenses amounted to Dh324 million, 22 per cent higher than last year’s first quarter but five per cent lower than fourth quarter 2011.
The income generated from fees and commissions by the corporate and the retail bank totalled Dh307 million, which despite being 24 per cent lower than in first quarter 2011, were back on ascending trend exceeding third quarter 2011 by 18 per cent and fourth quarter 2011 by 26 per cent.
“FGB started 2012 with a positive momentum. Analysis of FGB’s revenue during the first quarter highlighted a very strong contribution from net interest and Islamic financing income at Dh1.29 billion; 13 per cent higher than in first quarter 2011. Furthermore, the net interest margin of 3.6 per cent was maintained at the same level as in the first quarter last year,” the bank said in a statement.
During the first quarter, FGB focused on efficiently managing its excess of liquidity in order to bring it to appropriate levels. Liquid assets to total assets ratio was at 14.7 per cent compared to 13.9 per cent at the end of last year.
Signs of resuscitation
Naveed Ahmad, senior financial analyst at Global Investment House, said: “FGB’s net income was driven by growth in the top line and a decline in provisions. Bottom-line could have been better if it were not for the 22 per cent year-on-year rise in operating expenses and the drop in non-interest income on account of a decline in fee generation.
“Fee and commission income, though down by 25 per cent year on year, did show some signs of resuscitation with growth of 24 per cent. On the flip side, net interest income, though up by 13 per cent year on year, seems to have come under pressure and was down four per cent quarter on quarter.
“Continuation of dampened loans growth and erosion of spreads will certainly not bode well for the bank’s top line, but we do not expect this quarter to be representative of the full year.
“We remain neutral on the bank’s overall performance for the quarter and await detailed financials to make further assessment.”
While the loan to deposit ratio was 101 per cent, the Central Bank advance to stable deposit ratio was at a comfortable level of 86.8 per cent.
These strong liquidity ratios were coupled with a relatively high return on average assets of 2.4 per cent which is always higher than FGB’s peer group of large UAE banks.
results
strong performance
Dh26m
total shareholder equity at end of March
21.2%
Capital Adequacy Ratio at end of March
income
Gulf News Report
Gulf News 2012. All rights reserved.
