FGB’s first quarter net profit down 6% to Dh1.33b

28/04/2016 05:42 AST

First Gulf Bank (FGB) reported on Wednesday first quarter 2016 group net profit of Dh1.33 billion, down 6 per cent compared to Dh1.42 billion in the first quarter of 2015.

“The Group continued to demonstrate resilience in an operating environment marked by challenging global market conditions resulting in a slowdown in overall economic business activity,” said Abdulhamid Saeed, FGB’s Managing Director and Board Member.

FGB Group net profit was above 60 per cent of revenue, largely due to operating efficiency, which is reflected by a cost-to-income ratio at 20.3 per cent, the bank said in a statement.

Bank’s total assets at Dh227.4 billion at the close of the first quarter of 2016 was up 6 per cent compared to the same quarter last year. While loans and advances increased 7 per cent year on year to Dh152.5 billion from Dh142 billion in the first quarter of 2015, customer deposits at Dh140.8 billion at March 31, 2016 was down 2 per cent compared to Dh142.8 billion at the end of first quarter 2015.

Provisions against impaired loans at Dh376 million was up 1 per cent year on year and down 26 per cent quarter on quarter. Bank maintained strong credit quality with non-performing loans (NPL) ratio at 2.6 per cent and provision coverage ratio at 109.8 per cent. Due to prevailing global market conditions, our priority was to focus on long-term sustainability in returns, rather than short-term revenue growth, in order to maintain strong asset quality, which is in the best interest of shareholders. During the last quarter, we continued to deliver good momentum across our core businesses and within our risk appetite framework, ending the period with improved credit quality metrics,” said André Sayegh, CEO of FGB.

The bank maintained strong capital adequacy ratio of 18.2 per cent at the close of the first quarter of 2016 after payment of Dh4.5 billion cash dividends and a comfortable liquidity position providing a strong foundation for the remainder of 2016. Despite the challenging economic environment the bank expects maintain strong performance this year.

“The fact that global operating conditions are expected to remain challenging is a market reality, however we have the right strategy and fundamentals in place to continue navigating current headwinds and turning challenges into opportunities, until the economic cycle reverses,” said Sayegh.

Gulfnews