Arab Today, arab today first gulf bank q2 net profit up 14
Last Updated : GMT 20:01:04
Arab Today, arab today
Arab Today, arab today

First Gulf Bank Q2 net profit up 14%

Arab Today, arab today

Arab Today, arab today First Gulf Bank Q2 net profit up 14%

Abu Dhabi - Arabstoday

First Gulf Bank, the second-largest lender by market value in the UAE, posted a 14 per cent rise in second-quarter net profit on the back of increased lending and a better net interest margin, beating analysts’ forecasts. First Gulf Bank has once again registered record profit rates, where it announced its net profit for second quarter of 2012 at Dhs1,017 million, 14 per cent higher than the same period last year. This figure results in a 11 per cent increase in the net profits of H1 2012 compared with H1 2011. FGB’s strong financial performance was most notably a result of the growth of its loans, where a 6 per cent increase was witnessed in Q2 2012, compared to a flat performance during the previous quarter. New loans were originated by a diverse clientele base comprising of Government-related entities, private corporate, and retail clients, in addition to the multinational customers booked locally and overseas. Through implementing a new financial strategy focusing on managing all balance sheet components, FGB grew its net interest margin from 3.6 per cent by end of Q1 2012 to 3.8 per cent by end of Q2 2012. FGB’s outstanding performance was recognised by a number of prestigious organisations, including leading financial publication Euromoney, which named it as the ‘Best Bank in the UAE’ during its Awards for Excellence- Middle East 2012 ceremony. Capital Intelligence (CI) also affirmed FGB’s Long Term Foreign Currency Rating at ‘A+’ in June 2012 with a “Stable” outlook, thereby highlighting its solid financial position. Furthermore, FGB was reaffirmed with an A+/stable outlook by Fitch earlier in 2012 and at A2 by Moody’s in August 2011. The core banking net profits represented 97 per cent of the total net profit of the group including businesses like Corporate, Retail, Treasury and Investments, Financial Institutions, Islamic and International. The remaining 3 per cent was contributed by the subsidiaries and associated companies of the group. FGB’s international operations started to play an important role in complementing the bank’s strong performance this quarter, actually, 5 per cent of the group Net Profit was contributed by the bank’s global locations, namely Singapore, Qatar and India. Commenting on FGB’s outstanding performance, Andre’ Sayegh, CEO of FGB, said: “Our consistent positive performance stands as a strong undisputed assurance to the effectiveness of our dynamic strategy, which will continue to steer our operations into the coming periods. As the UAE economy continues to pick up momentum, and we witness more favourable market conditions, FGB is committed to uphold its leading position in the local and regional markets alike.” As has become customary for the bank, FGB continues to lead the local market in its efficiency in managing its group’s expenses, which amounted to Dhs667 million for the first half of 2012. Though a 20 per cent increase in comparison with H1 2011, the bank has, however, been able to maintain its cost to income ratio at a low rate of19.3 per cent, which is the lowest registered ratio in the UAE banking industry. Abdulhamid Saeed, FGB Managing Director and Board Member, commented: “In spite of the international market turbulences which have affected a number of financial institutions, FGB emerges as the solid institution capable to withhold tough times and to outperform during good times due to its balanced strategy. As the UAE continues to be seen as a safe refuge for investors in the region, this is definitely supporting the bank to realise its strategy moving forward.  Our Financial strategy has always been based on wise risk management, particularly on maintaining a solid balance sheet.” The bank started also benchmarking its current liquidity ratios to the new ones to be implemented starting 2013 as per the new UAE CB regulations on liquidity. “We are in a very solid position to be fully compliant with the new circular,” said Andre Sayegh. During the first half of 2012, through its regular access to the capital markets, FGB was successful in raising $500 million worth of Sukuk and $200 million in the form of a bilateral loan. Abdulhamid Saeed stated: “FGB’s strategy is focused on growing its businesses and rewarding investors accordingly, FGB is firmly placed in a strong position to implement future growth plans, which will have in parallel a positive impact on the growth of its Earnings per Share.” From gulftoday

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