DUBAI - First Abu Dhabi Bank, the biggest lender in the United Arab Emirates, posted a record net profit in 2021, fuelled by the country's economic recovery last year from the height of the pandemic.

The strong earnings were helped by a sharp jump in non-interest income, which rose 59% from a year earlier, driven by gains in investment banking and trading.

CEO Hana Al Rostamani said the investment banking business had "an exceptional year", originating and structuring a number of landmark transactions, and leading new offerings and new company listings on the Abu Dhabi bourse.

FAB reported a net profit of 12.53 billion dirhams ($3.41 billion) last year, up about 19% from 10.55 billion dirhams in 2020.

The UAE lender was expected to report an annual net profit of 12 billion dirhams, according to Refinitiv Eikon data.

FAB also reported a fourth-quarter net profit of 3.3 billion dirhams, up 3% from a year earlier, above analysts' estimates.

Loans grew 6% in 2021 from a year earlier, partly helping total assets to reach a record 1 trillion dirhams.

Smaller rival Emirates NBD posted a 34% rise in annual profit on Wednesday as an improving economy boosted investment banking income, while impairments fell.  

FAB also said it will split its dividend of 0.70 dirhams into cash and shares for the first time, giving shareholders flexibility to own more shares in the lender.

The dividend will be split into 0.49 dirhams a share in cash and 0.21 dirhams as scrip dividend. New shares will be issued at 17.97 a share, it said.

FAB last year acquired the Egyptian unit of Bank Audi, which helped revenue from its international operations grow 26% year-on-year, driven by Middle East and North Africa.

Shares of FAB were up 9% year-to-date, reflecting investor expectations of an economic recovery and hope that rising interest rates will boost earnings.

($1 = 3.6726 UAE dirham)

(Reporting by Saeed Azhar; Editing by Shailesh Kuber and Shounak Dasgupta) ((; +971 44536787; Reuters Messaging: