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The UAE’s biggest lender First Abu Dhabi Bank (FAB) posted a Q4 2023 net profit of 4 billion dirhams ($1.09 million), up 63% year-on-year (YoY) as operating income grew due to business volumes and improved margins.
For FY 2023, the bank made a net profit of AED 16.4 billion, 22% higher YoY, or 56% higher on an underlying basis when excluding gains from the sale of stake in subsidiaries, according to the lender's statement on Thursday on Abu Dhabi's ADX exchange where its shares trade.
The quarterly profit far exceeded analysts’ mean estimates for both the quarter and the full year. For Q4 they had pencilled in AED3.67 billion, while for FY the estimate was AED15.3 billion, according to LSEG data.
Net interest income for Q4 was AED4.7 billion, up 12% YoY, as the benefits of higher benchmark rates kicked in. Net interest margin (NIM) was at 1.89% for the quarter.
For the fourth quarter, impairment charges were up 10%, mainly due to the downgrade of Egypt’s credit rating, the bank noted.
Lars Kramer, FAB Group CFO said: “These are a very strong set of results. Group revenue and net profit reached new record highs and performance was consistent across our core business segments... The strength of our franchise, rock-solid capital base, leading liquidity position, and high-quality risk profile, bolster confidence in our outlook for 2024 and beyond."
The lender's board has recommended a dividend payout of AED7.8 billion, representing 50% of the net profit. FAB termed this the "highest cash dividend payout since 2020."
(Reporting by Brinda Darasha; editing by Seban Scaria)
