First Abu Dhabi Bank's Q1 profit jumps 23% to Dh5.13b

30/04/2025 08:01 AST

First Abu Dhabi Bank (FAB), the UAE's largest bank, announced a 23 per cent increase in its first-quarter net profit, reaching Dh5.13 billion compared to the same period last year.

The bank's profit before tax also climbed 22 per cent to Dh6.13 billion, driven by strong client activity and diversified income streams, according to a statement released on Tuesday. FAB's group revenue for Q1 2025 rose 11 per cent year-on-year to Dh8.81 billion, fuelled by double-digit growth across all business segments.

Non-interest income, which surged 22 per cent, accounted for 43 per cent of total revenue, highlighting the bank's successful diversification strategy. Loans and deposits grew by 8 per cent and 4 per cent, respectively, while total assets increased 6.0 per cent to surpass Dh1.3 trillion for the first time. The bank's net interest margin improved by 4 basis points quarter-on-quarter to 1.97 per cent, and its cost-to-income ratio tightened to 22.3 per cent from 24 per cent in Q1 2024. The bank's return on tangible equity (RoTE) rose to 20.4 per cent, up from 17.4 per cent in Q1 2024, aligning with FAB's medium-term target of exceeding 16 per cent.

Supported by an AA- credit rating, the highest in the Mena region, FAB's solid balance sheet underscores its position as a leading financial institution in the region and a key driver of the UAE's economic growth.

Hana Al Rostamani, FAB's group chief executive officer, attributed the strong performance to sustained growth across the bank's business segments and its expanding international presence. "We continue to capitalise on the UAE's economic growth and our global footprint, expanding in investment banking, wholesale banking, personal, business, wealth, and privileged client banking," she said. Al Rostamani added that FAB's focus on innovation and customer experience, supported by advanced technology and AI, which has bolstered its wealth and private banking franchise, with assets under management soaring 57 per cent year-on-year.

Lars Kramer, FAB's group chief financial officer, noted that operating income grew 11 per cent to Dh8.81 billion, offsetting the impact of increased UAE corporate tax. "Strong commercial momentum, resilient margins, and robust fee and trading performances contributed to these results," Kramer said. He highlighted FAB's disciplined strategy, operational efficiencies, and prudent risk management as key factors in navigating evolving market dynamics.

Investment banking
FAB's investment banking and markets division delivered a standout performance, with revenue up 15 per cent year-on-year and 22 per cent quarter-on-quarter. The bank's equity and debt capital markets franchises facilitated $29 billion in client fundraising, a 56 per cent increase from Q1 2024. Wholesale banking revenue grew 12 per cent, supported by 13 per cent growth in loans and 18 per cent in deposits. The personal, business, wealth, and privileged client banking segment saw an 11 per cent revenue increase year-on-year, driven by strong retail momentum and customer acquisitions.

Customer deposits rose 4 per cent year-on-year and 7 per cent year-to-date to Dh839 billion, reflecting robust inflows from both wholesale and retail clients. Current and savings account (Casa) balances grew 5 per cent year-to-date and 10 per cent year-on-year to Dh376 billion, representing 45 per cent of total deposits. FAB also raised Dh5.3 billion in senior wholesale funding, including a $600 million five-year Sukuk at a record-tight spread for a Mena bank and a $750 million five-year Formosa FRN bond at the lowest pricing ever achieved by a Mena bank in that market.

The bank said its Q1 2025 results position it for sustained growth, with a focus on leveraging its strong capital base, liquidity, and diversified business model to drive long-term value for shareholders and stakeholders while remaining committed to innovation and delivering consistent returns in a dynamic global market.issacjohn@khaleejtimes.com

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