• Published on 31 July 2024
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FAB reports $2.28B net profit, $4.2B revenue in H1 2024

First Abu Dhabi Bank (FAB) has delivered record results for the first half of 2024, with a net profit of AED 8.4 billion ($2.28 billion) and revenue of AED 15.7 billion ($4.2 billion), reflecting a 16% increase year-on-year (yoy).

Profit before tax grew 15% yoy to AED 10.0 billion ($2.7 billion), while second quarter 2024 (Q2 2024) net profit was AED 4.3 billion ($1.1 billion) and operating income was AED 7.8 billion ($2.1 billion), up 14% yoy.

FAB’s robust results were driven by double-digit growth across interest and non-interest income sources, helped by strong business momentum, expansion in net interest margin (NIM), and an improved revenue mix, with non-funded income (NFI) contributing 38% to group revenue, up from 35% in H1 2023.

As of the end of June 2024, FAB reinforced its position as the largest bank in the UAE with total assets at AED 1.2 trillion ($320 billion). Loans, advances and Islamic financing grew 6% both ytd and yoy to AED 513 billion ($139.6 billion), reflecting healthy demand and market share gains across key segments and geographies.

In the first half of 2024, FAB delivered a return on tangible equity (RoTE) of 17.3%, including 18.1% in Q2 2024, demonstrating the group’s laser focus on shareholder value. Balance sheet fundamentals remained strong through solid asset quality metrics, with a non-performing loans (NPL) ratio of 3.7%, and a strong liquidity profile displayed in a liquidity coverage ratio of 152%. The group’s cost-to-income ratio of 24.4% at the end of June 2024 demonstrated superior operating efficiency.

Hana Al Rostamani, group CEO of FAB, said: “FAB is reaffirming its position as a leading force in the MENA banking sector, with the group delivering another strong set of results in the second quarter and first half of 2024. Group net profit and revenue both reached new highs, at AED 8.4 billion ($2.28 billion) and AED 15.7 billion ($4.2 billion), respectively.

FAB continues to leverage its international network to capitalise on market opportunities across the globe. The bank is actively building and expanding business corridors in close alignment with national ambitions, reinforcing its international franchise as a foundation for growth and resilience.

During the first half of 2024, we continued to unlock long-term value through sustainable growth and diversification, strategic partnerships and enhanced customer experience and service delivery through innovation and future technologies.

Rostamani said: Our outlook remains anchored in the strong fundamentals of the UAE and Abu Dhabi as a global economic powerhouse and preferred hub for investment, talent, and innovation. We remain on track to meet our 2024 and medium-term guidance, and to deliver sustainable shareholder returns.”

Lars Kramer, group chief financial officer of FAB, added: “Building on a robust first quarter, we are very pleased with our progress in the first half of 2024. We continued to achieve high returns at scale while driving diversified growth across our franchise and investing strategically to create future efficiencies."

Consistent growth in both interest and non-interest income sources reflects our efforts to enhance cross-selling and deepen client relationships, leveraging our differentiated strengths and international footprint.

While lending momentum was healthy year-to-date, we have also benefited from incremental improvements in net interest margins for the fourth consecutive quarter, reflecting dynamic balance sheet management and optimal positioning ahead of a shift in interest rates.

Kramer said: “With our leading liquidity position and high-quality risk profile, we are upholding very strong fundamentals including a rock-solid capital base, which consolidated further following our Tier 2 bond issuance earlier this month.”

FAB reported strong performance across all business lines in H1 2024, led by investment banking and global markets with significant increases in operating income of 23% yoy and 26% yoy, respectively. Consumer banking operating income advanced 16% yoy, reflecting double-digit growth in loans and deposits, new customer acquisitions, enhanced digital service and compelling product offerings.

Private banking and corporate and commercial banking continued to accelerate client acquisitions and client activity, with the former reporting 25% growth in assets under management. The group’s international revenue was up 30% yoy, while operating income growth in the UAE also remained strong at +13% yoy.

Key operational highlights for H1 2024:

• FAB fostered the development of regional capital markets as a key facilitator of landmark transactions raising AED 7 billion ($1.9 billion) in equity capital market transactions.
• The bank continued its strong momentum in Egypt through FABMisr, complemented by healthy growth in other markets including KSA and India.
• It continued the deployment of AI and GenAI capabilities across the group, including the deployment of FAB’s first in-house conversational analytics tool, and the launch of AI Academy in collaboration with Microsoft.
• It facilitated over AED 52 billion ($14.1 billion) of sustainable and transition financing in Q2 2024 and AED 78 billion ($21.2 billion) in H1 2024, taking total projects to date to AED 200 billion ($56 billion) or 41% of FAB’s 2030 pledge of AED 500 billion ($136 billion), the largest commitment by any MENA company and half of UAE banks’ commitment.

 Re-disseminated by The Asian Banker