ABU DHABI (The Thursday Times) — First Abu Dhabi Bank (FAB), the largest lender in the UAE, has reported a net profit of AED 4.46 billion for the third quarter of 2024, representing a 5% year-on-year increase. The profit exceeds analysts’ estimates of AED 4.06 billion, underscoring the bank’s resilience in a challenging financial environment. FAB attributed its performance to significant revenue growth, which was strong enough to counterbalance a substantial rise in impairment charges.
Operating income for the quarter surged by 18% year-on-year to AED 8.20 billion. This growth was driven by FAB’s diversified business model and strong lending activities, reinforcing its position as a leading financial institution in the Middle East. Despite the positive income growth, the bank faced a 50% year-on-year increase in impairment charges, amounting to AED 909 million, reflecting the bank’s cautious stance towards credit risk.
Net interest margin narrows amid challenging conditions
FAB’s net interest margin (NIM) for the quarter stood at 1.89%, representing a slight decline from the previous quarter and year-on-year figures. The bank cited several contributing factors, including increased cash reserve requirements and higher central bank placements. Additionally, a 50-basis-point reduction in benchmark interest rates further compressed margins. Despite these challenges, FAB maintained solid profitability, demonstrating the bank’s ability to adapt to shifting market conditions.
Rise in operating expenses and asset growth
Operating expenses also rose in Q3, increasing by 9% year-on-year to AED 1.98 billion. FAB has been actively investing in digital transformation and expanding its operational capacity, which contributed to the increase in costs. However, the bank’s strategic initiatives are expected to enhance long-term efficiency and service quality, positioning FAB as a more competitive player in the regional banking landscape.
FAB’s total assets grew by 5% year-to-date and 4% year-on-year, reaching AED 1.2 trillion. The increase in assets underlines the bank’s continued growth trajectory, driven by robust lending, investment activities, and market share expansion. As one of the largest banks in the Middle East, FAB continues to be a key financial pillar in the UAE’s economy.
Nine-month performance highlights resilience
For the first nine months of 2024, FAB recorded a net profit of AED 12.9 billion, a 4% year-on-year increase. The results reflect the bank’s ability to navigate economic uncertainties, deliver consistent returns to shareholders, and maintain strong capital buffers. FAB’s focus on long-term growth and risk management has positioned it to weather financial market fluctuations, maintaining its standing as a regional leader in banking and finance.∎
