The bank continued its focus on prudent and efficient management of its balance sheet and income statement which reflected in strong financial ratios.
Cost to Income ratio stood at 17.2%, Net Interest Margin at 3.60%, Return on Average Assets at 2.6%, Capital Adequacy Ratio at 23.4%, and Return on Average Equity at 14.8%.
“The bank strategy of targeting its ratios resulted in building a solid balance sheet position over the years. We are very proud to state, that this combination of ratios is unmatched in the UAE banking industry. First Gulf Bank is in a very strong financial position and will maintain its primary objective of maximizing value for all its stakeholders,” said André Sayegh, Chief Executive Officer, FGB.
Although, the Net Profit for the quarter was 9% lower than the same quarter of last year, the core banking Net Profit, after excluding the Net Profit of subsidiaries and associates, has increased effectively by 15% from Dhs712m to Dhs821m.
The Total Revenue of Dhs1,546m for Q3 2010 is 5% higher than previous quarter and 8% lower than Q3 2009. Net Interest and Islamic Financing at Dhs1,072m, which represented 70% of the total revenue, increased by 9% compared to the same period of last year and the Corporate and Retail fees, at Dhs435m, which represented 28% of the revenue for the quarter, increased by 43% compared to Q3 2009 and by 22% compared to Q2 2010.
Overall, the core banking revenue contributed 98% towards the total revenue compared to 87% in the Q3 2009.
“We are very pleased with the robust results of the Third Quarter and we will maintain our focus on the core strength of the bank in Corporate, Retail and Treasury activities. The overseas expansion, subsidiaries and associated companies will continue to present complementary support to our core businesses,” commented Sayegh.
Over the last 12 months ending September 30th 2010, the Total Assets increased by 11%, the Loans by 6% and the Deposits by 9% after excluding the MOF deposits which were converted into Tier II capital at the end of 2009.
Nine Months Period Ending September 30th 2010
FGB recorded Net Profit of Dhs2,555m for the first nine months of 2010, an increase of 4% over the first nine months of 2009. This was mainly driven by Dhs352m (+8%) increase in total revenue, an increase of Dhs6m (+0.7%) in expenses, and an increase in total provisions by Dhs245m (+23%).
The increase in revenue was largely attributed to the Net Interest and Islamic Financing, which increased by 12% from Dhs2,818m in the first nine months of 2009 to Dhs3,152m in the first nine months of 2010. The Net Interest Margin for the same period of 2010 was at 3.60% compared to 3.67% for the full year 2009. Fees and Commissions realising an increase of 24%, increased from Dhs917m in the first nine months of 2009 to Dhs1,139m in the same period of 2010.
During the first nine months of 2010, the bank continued with its prudent provisioning policy and booked adequate and appropriate provisions of Dhs1,310m compared to Dhs1,065m during the first nine months of 2009. The important indicators of Non Performing Loans to Gross loans of 2.5% with Provision Coverage ratio of 126% stabilized at the same level of June 2010.
Earnings per Share of Dhs1.59 for the first nine months of the year were 7% higher than the same period of 2009.
Balance Sheet and Ratios
The Bank continued to show robust balance sheet and financial indicators at the end of September 2010; Total Assets of Dhs137.5bn, 10% higher than December 2009. The loans at Dhs95.6bn were 6% higher than December 2009. The Deposits at Dhs92.3bn were 7% higher than December 2009.
The Loan to Deposit Ratio was 104% at the end of September 2010, compared to 105% at the end December 2010. The Central Bank Advance to Stable Deposits Ratio at only 84% at the end of September 2010, is substantially below the maximum of 100% allowed by the UAE regulatory authority, underscores sufficient level of liquidity.
Total Shareholders’ Equity stood at Dhs23.7bn at the end of September 2010, 9% higher than September 2009 and Capital Adequacy Ratio was at 23.4% including a Tier 1 ratio of 20.2%.
Abdulhamid Saeed, FGB’s Managing Director, commented, “First Gulf Bank, under its dynamic Board leadership and committed management, has consistently maximized value for all its stakeholders.”
Wednesday, October 27- 2010 @ 16:34 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.