First Abu Dhabi Bank’s 2017 profit hit by merger costs

First Abu Dhabi Bank (FAB), the largest bank in the United Arab Emirates, on Monday reported a 3.5 per cent profit fall in 2017, citing costs linked to its recent merger.

FAB, the combination of National Bank of Abu Dhabi and First Gulf Bank, said its full-year net profit was Dhs10.92bn ($3bn) compared to Dhs11.32bn in 2016.

Excluding integration costs and other merger-related expenses of around Dhs601m, adjusted net profit for the year was Dhs11.52bn while fourth-quarter profit was up 6 per cent from the same period of last year, FAB said.

FAB’s board of directors recommended a cash dividend of Dhs0.70 per share, which it said was the highest combined dividend distributed by the two banks, up 11 per cent from 2016.

It said it had achieved around Dhs500m of cost synergies in the first year of integration, adding that it was evaluating its local activities and branch network.

Read: Newly merged lender First Abu Dhabi Bank set to cut jobs

“Regionally, we are working on expanding our presence to Saudi Arabia which forms part of FAB’s long-term strategy,” group chief executive Abdulhamid Saeed said.

Regional and international banks are eyeing opportunities to expand in Saudi Arabia, the largest economy in the Gulf, as the government pushes through reforms to cut the country’s dependence on oil revenue.