NBF Q3 2017 operating profit grows 11.9%

National Bank of Fujairah, NBF, has announced its results for the nine month period ending 30th September 2017, posting an operating profit of AED228.7 million in the period, a rise of 11.9 percent quarter-on-quarter, and an increase of 5.2 percent for the nine month period compared to 2016.

According to a press release from the bank, this reflects a high level of resilience in the bank’s core business and enhanced balance sheet management in a rising interest rate environment. On the back of a strong Q3 2017 performance, NBF reported a net profit of AED401.4 million for the nine month period ended 30th September 2017, up 2.7 percent over the corresponding period of 2016.

Net interest income and net income from Islamic financing and investment activities for the quarter grew by 11.5 percent, and 6.8 percent for the nine month period compared with 2016.

Operating income for the quarter experienced a growth of 8.6 percent and 4.0 percent for the nine month period compared to 2016. Income from investments and Islamic instruments doubled to AED14.7 million compared to the corresponding period of 2016.

Loans and advances and Islamic financing receivables rose 3.6 percent from AED22.8 billion at 2016 year end to AED23.6 billion, and up by 8.0 percent from 30th September 2016. The growth compares well relative to the marginal decline in credit growth at the industry level, reported in August 2017 in the UAE Central Bank’s statistics report.

Customer deposits and Islamic customer deposits increased marginally by 0.6 percent from AED25.9 billion at 2016 year end to AED26.1 billion, and up by 12.9 percent from 30th September 2016.

Shareholders’ equity of AED4.8 billion exceeded the 2016 year end level by 5.4 percent, an increase of 6.7 percent from 30th September 2016.

Strong capital adequacy and liquidity levels were maintained, well ahead of Central Bank’s minimum requirements. Capital adequacy ratio was 17.95 percent, lending to stable resources ratio stood at 87.8 percent and eligible liquid assets ratio, ELAR, remains as one of the highest at the industry level at 20.8 percent.

Operating expenses increased marginally by 1.6 percent, reflecting NBF’s disciplined cost management, prudent investments in the bank's businesses, systems and infrastructure, including a set of digital initiatives to enhance our offerings and customer service. Cost-to-income ratio stood at 34.2 percent compared to 34.9 percent in the corresponding period of 2016.

NBF continued with its prudent and transparent approach towards proactively recognising and providing for problem accounts. Net impairment charge was AED266.0 million compared to AED243.2 million in the corresponding period of 2016. The NPL ratio was 5.57 percent compared to 4.95 percent as at 31st December 2016. Total provision coverage ratio was 95.2 percent compared to 101.3 percent as at 31st December 2016. Total provision coverage including collaterals improved to 106.6 percent.

Return on average assets was 1.5 percent (31st December 2016: 1.4 percent) and return on average equity was 11.4 percent (31st December 2016: 10.4 percent).

NBF’s long term FCR was re-affirmed at A- by Capital Intelligence, with a stable outlook, highlighting the bank’s underlying strength, prudent risk management and resilience.