FAB reports First Half 2020 Group Net Profit of AED 4.8 Billion
Second quarter net profit at AED 2.4 Billion, flat compared to the first quarter, with operating profits up 11%
First Abu Dhabi Bank (FAB), the UAE’s largest bank and one of the world’s largest and safest financial institutions, reported its financial results for the first half ended 30 June 2020 today.
The bank continued to deliver a resilient performance against an unprecedented global backdrop arising from the COVID-19 pandemic, a low interest rate environment, as well as volatile market conditions. Our resilience and conservative business approach have resulted in a net profit of AED 2.4 Billion in the second quarter of 2020, which was flat compared to the first quarter as higher impairment charges were offset by revenue growth and cost management initiatives. Net profit for the first six months of 2020 was AED 4.8 Billion, down 24% compared to the same period in 2019, driven mainly by an increase in impairment charges and lower revenues, partly mitigated by cost reduction. The Bank’s balance sheet strengthened further during the period with improvements in liquidity and capital ratios, and resilient asset quality metrics. FAB continued to leverage its scale and inherent strength to provide relief to customers in line with the UAE Central Bank Targeted Economic Support Scheme (TESS), and the bank’s own programmes.
A resilient performance despite significant headwinds
- First Half 2020 Group Net Profit at AED 4.8 Billion, compared to AED 6.3 Billion in the first half of 2019
- Second quarter Group Net Profit at AED 2.4 Billion, was flat compared to Q1’20, with operating profits up 11%
- Annualised Earnings Per Share (EPS) at AED 0.84, from AED 1.12 in the prior year comparative period
- Half year operating income at AED 9.4 Billion, compared to AED 10.1 Billion in the first half of 2019
- Operating costs at AED 2.6 Billion, reduced 3% year-on-year
- Cost-to-income ratio (ex-integration costs) was 27.3%, compared to 26.1% in the first half of 2019, while Q2’20 cost-to-income ratio improved to 25.5% from 29.1% the previous quarter
- Impairment charges increased to AED 1.8 Billion, reflecting the challenging macro-economic environment,
translating to an annualised cost of risk of 87 bps, up from 49 bps in the first half of 2019
Strengthened liquidity and capital position, and resilient asset quality
- Total assets at AED 866 Billion, up 12% year-on-year
- Loans and advances at AED 385 Billion, up 5% year-on-year and 1% from March-end 2020
- Customer deposits at AED 519 Billion, up 12% year-on-year, and 4% from March-end 2020, with Current Account and Savings Account (CASA) balances at a record high of AED 196 Billion
- Liquidity Coverage Ratio improved to 129%, demonstrating a strong liquidity and funding profile
- Non-Performing Loan ratio at 3.9%, provision coverage ratio at 91%
- Common Equity Tier 1 (CET1) ratio strengthened to 13.6%, while Tier 1 capital and total capital ratios also emained comfortably above Basel III regulatory requirements at 15.2% and 16.4%, respectively