First Gulf Bank Q1 Profit Up 12%

First Gulf Bank, the second-largest bank in the United Arab Emirates by market value, posted a 12 per cent increase in first-quarter net profit on Monday on the back of higher net interest income, but missed the average forecast of analysts.

FGB made a net profit of Dhs1.05 billion ($285.9 million) in the first three months of 2013, up from Dhs934.7 million in the same period of last year, it said in a statement.

Five analysts polled by Reuters had expected a profit of Dhs1.1 billion.

The bank attributed the profit increase to a six per cent hike year-on-year in net interest and Islamic financing income, which reached Dhs1.38 billion in the opening quarter of 2013. Total revenue was up 12 per cent to Dhs1.87 billion.

However, bad loan provisions for the first quarter were Dhs433.3 million, up from Dhs412.7 million in the corresponding period of 2012.

Compared to the end of 2012, loans and advances were up three per cent while deposits were flat.

“FGB is off to a highly positive start in 2013. Our priority remains solid control on balance sheet management, simultaneously factoring a consistent and paced growth,” chief executive Andre Sayegh said in the statement.

In early March, FGB fully repaid the Dhs4.5 billion of federal government funds that it had received as support in the wake of the global financial crisis.

Banks in the UAE have posted strong profit growth for the first quarter, with National Bank of Abu Dhabi and Dubai’s Emirates NBD reporting year-on-year increases of 36 and 31 per cent respectively.

Confidence in the banking sector has helped boost the UAE stock markets, which are at multi-year highs. FGB itself was up 30.6 per cent year-to-date at the end of share trading on Sunday.