UAE top lender FAB posts record profit helped by stake sale

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First Abu Dhabi Bank (FAB), the United Arab Emirates’ biggest lender, reported on Thursday its highest ever quarterly net profit, helped by the sale of a majority stake in its payments business.

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The UAE banking sector is improving on the back of a further easing in COVID-19-related restrictions and a rebound in oil prices, boosting economic activity.

The Abu Dhabi-headquartered bank made $1.4 billion (5.1 billion dirhams) in the January-March period, up 107 percent compared to the $680.6 million (2.5 billion dirhams) logged in the period a year ago.

Arqaam Capital had forecast a net profit of $830.8 million (3.05 billion dirhams) for the quarter, while EFG Hermes had put it at $844 million (3.1 billion dirhams).

Total quarterly income stood at $2 billion (7.3 billion dirhams), which includes the $762.3 million (2.8 billion dirhams) net gain from the Magnati stake sale, up from $1.1 billion (4.4 billion dirhams), according to a stock market filing.

Group Chief Financial Officer James Burdett said growth had picked up across all business segments during the quarter and that group loans had expanded by six percent year-to-date.

“Looking ahead and despite ongoing global uncertainty, we see significant momentum in the UAE which FAB is very well positioned to support and capitalize on,” Group CEO Hana al-Rostamani said in a statement.

The bank said core underlying performance was healthy, driven by higher net interest income, a pick-up in fees and commissions and positive contribution from Bank Audi Egypt, helping offset lower trading and investment income.

FAB said loans, advances and Islamic financing rose 15 percent year-on-year, while customer deposits increased six percent from a year earlier.

Impairment charges fell to $124.4 million (457 million dirhams), compared to $128 million (470 million dirhams) in the first quarter of 2021.

FAB recently withdrew its offer for a controlling stake in Egyptian investment bank EFG Hermes, citing global market uncertainty.

The CEO said Egypt remained a strategically important market for the group.

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