First Gulf Bank (FGB) yesterday announced a net profit of Dh920 million for the third quarter of 2011, an increase of 8 per cent over the Dh849 million reported in the same quarter of 2010. FGB\'s core banking revenue stood at Dh1.59 billion, which represented 98 per cent of revenue and was 6 per cent higher than in the same period last year. \"Over the past few quarters we have witnessed consistent growth in our core businesses, which have been on an ascending curve since the second quarter of 2010. We are on the right path with this continuous progress to meet our set targets for 2011,\" Andre Sayegh, CEO of First Gulf Bank, said in a statement. Provisions fall The bank reported a net profit of Dh2.68 billion for the first nine months of the year, up 5 per cent over the same period last year on the back of an increase in core revenues and a five per cent decrease in provisions. \"Our sound credit and risk strategy as well as the emphasis we place on our core banking activities means that we have a strong revenue-generating power which will reflect the greater values for our shareholders,\" said Abdul Hamid Saeed, Managing Director. Between December 2010 and September 2011, the net interest margin improved to 3.75 per cent from 3.6 per cent, and the non-performing loans to gross loans ratio gradually fell from 3.7 per cent to 3.4 per cent. FGB\'s cost to income ratio rose slightly to 18.3 per cent from 17.8 per cent. Islamic financing Net interest and Islamic financing revenue for the third quarter stood at Dh1.35 billion, 26 per cent higher than last year. Fees and commissions at Dh261 million were 10 per cent lower than the previous quarter and 40 per cent lower than the third quarter of 2010. The bank attributed the decline to regulatory changes in retail lending. The ratio of non-performing loans (NPLs) to gross loans after excluding Dubai World exposure was 3.4 per cent by the end of the third quarter. The NPL ratio decreased from 3.5 per cent at the end of June 2010 and 3.7 per cent at the end of December 2010. The bank\'s provision coverage ratio improved from 89 per cent at the end of December 2010 to 105 per cent at the end of September 2011. Non-performing loans During this quarter, the bank booked provisions of Dh379 million, lower than the Dh411 million booked in the second quarter of 2011 and Dh459 million booked in the first quarter of 2011. Non-performing loans remained relatively stagnant over the previous quarter, possibly on write-offs. The NPL coverage ratio, however, inched up to 105 per cent from 102 per cent in the second quarter of 2011, as the bank took high provisions. \"Overall, FGB posted a good set of results; we may be prompted to slightly tweak our forecast for the full year upwards after a more detailed analysis,\" said Naveed Ahmad, Senior Financial Analyst of Global Investment House.