UAE’s National Bank of Fujairah reports 124.2% rise in net profit for 2021

UAE lender National Bank of Fujairah (NBF) reported a net profit of Dhs115.2m for the year ended December 31, 2021, marking a 124.2 per cent increase, compared to a loss of Dhs475.3m recorded in 2020.

The net profit was higher by 104.6 per cent for the three month period ending December 31, 2021, compared to an year-earlier period.

NBF posted an operating profit of Dhs955.6m in 2021, a rise of 6.8 per cent compared to Dhs894.6m in 2020. Operating income reached Dhs1.4bn, up 4.1 per cent over 2020. Meanwhile, net interest income and net income from Islamic financing and investment activities stood at Dhs941.1m compared to Dhs948.9m in 2020.

Net fees, commission and other income spiked 18 per cent to Dhs344.3m vis-à-vis Dhs291.7m in 2020. Meanwhile, foreign exchange and derivatives income reached Dhs114.2m compared to Dhs125m in 2020. Income from investments and Islamic instruments rose to Dhs42.3m compared to Dhs20m in 2020.

Operating expenses pared by 1 per cent to Dhs486.3m in 2021 compared to Dhs491m in 2020. Cost-to-income ratio improved to 33.7 per cent compared to 35.4 per cent in 2020.

Net impairment provisions also reduced by 38.6 per cent to Dhs840.4m compared to Dhs1.4bn in 2020. Total provision coverage ratio (including impairment reserves) stood at 87 per cent compared to 91.8 per cent as of December 31, 2020.

The NPL ratio improved to 9.8 per cent compared to 10.1 per cent as of December 31, 2020.

Loans and advances and Islamic financing receivables rose by 3.1 per cent to reach Dhs25.6bn compared to Dhs24.8bn at 2020 year-end. Investments and Islamic instruments stood at Dhs4.4bn compared to Dhs5.2bn at end of 2020.

Customer deposits and Islamic customer deposits increased by 8.2 per cent to reach Dhs32.2bn compared to Dhs29.8bn at 2020 year-end. Current and saving accounts (CASA) deposits increased to Dhs15.4bn as of December 31, 2021.

Total assets rose by 7.7 per cent to reach Dhs42.9bn compared to Dhs39.9bn at end of 2020. Return on average assets rose to 0.3 per cent from -1.1 per cent in 2020. Meanwhile, return on average equity improved to 2 per cent, up from -7.9 per cent in 2020.

Sheikh Saleh Bin Mohamed Bin Hamad Al Sharqi, chairman of NBF said: “2021 results mark a welcome return to profitable operations on the back of robust core business growth and improvement in cost of risk in line with the group’s strategy. Though the global outlook remains subject to downside risks and headwinds amid additional Covid-19 waves, the world is moving towards a recovery with the UAE proactively and dynamically geared towards the next fifty years of exceptional growth, digital innovation and a smart future.

“While we keep a vigilant stance on the external risk environment, the board believes that the lows of the recent periods are behind us and our continued focus on strengthening the core business, accelerating digital innovation focusing on the interests and needs of customers, equipping our staff members with the skill-sets of the future and facilitating our customers and societies to grab the opportunities present in the market. We also believe new opportunities will come from the increased attention on environmental, social and governance (ESG) matters, which will spur a further source of growth in 2022 and beyond.”

Dr Raja Al Gurg, deputy chairperson, added: “NBF achieved further progress against its strategic priorities, with a record performance in its retail business and another exceptional performance by business banking. We continue to work towards a digitally enabled and customer focused franchise to improve market share and leverage technologies in key focus areas where it can add real value to the customer experience.

“Supported by its strong capital base and the resolute backing of its principal shareholders, we are confident that NBF will continue on its growth trajectory through the cautious management of risks and the improving market opportunities expected in 2022 and beyond.”