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National Bank of Fujairah announced its results for the three months period ended 31 March 2008

NBF Q1 results show consistent business growth. Core operating income up 34% whilst impact of fair value losses on the Investment Portfolio restricts Profit to AED 55.4 Million

National Bank of Fujairah announced its results for the three months period ended 31 March 2008 recording profit of AED 55.4 million, down 31% from corresponding quarter of 2007 profit.

Core businesses maintained the growth in line with previous quarters on the back of strong growth in volumes despite pressure on margins due to excess domestic AED liquidity and lower inter-bank interest yields. Operating income excluding investment income showed a growth of 33.9% compared to corresponding quarter of 2007. Net interest income rose by 27.9% and fee income grew by 33.0%. The Bank's focus on foreign exchange sales contributed the best quarter ever with 76.3% growth in exchange income compared to corresponding quarter of 2007.

The net results were impacted by the global investment climate causing a significant decline in the fair value of the Bank's investment portfolio. Investment losses for the quarter were AED 30.3 million as opposed to Investment income of AED 22.5 million for the corresponding quarter of 2007. Management considers the fair value losses as industry driven and expects to see a recovery subject to global market conditions.
"Whilst first quarter results were affected by external factors, we are pleased to maintain the consistency of earnings in our core business areas and continued progress in Retail and SME businesses. NBF will continue to reap benefits of its 'build and diversify' strategy by making headway in SME and Retail segments. The focus will continue on adding value for shareholders and taking customer service experience to the next level", said the newly appointed NBF Chief Executive Officer, Steve Mullins.
Total assets and liabilities at AED 12.3 billion and AED 10.6 billion respectively grew by 42.1% and 51.6% respectively over 31 March 2007. Return on average equity dropped from 19.8% in 2007 to 12.7% while return on average assets was down to 1.8% for the quarter as opposed to 3.7% in 2007 reflecting lower level earnings due to fall in income on account of investment's fair value adjustment. Total shareholders' equity as of 31 March 2008 stood at AED 1.7 billion and the Bank's capital adequacy ratio at period end stood at 14.6% against the Central Bank minimum of 10%.

Operating expenses increased by 17.8% which largely reflects investment in new business initiatives, governance and infrastructure and strengthening of human capital. Cost to income ratio was 40.4% compared to 27.7% in the corresponding quarter of 2007 which reflects lower earning levels; however, adjusted for loss/ income from investments the ratio would be 30.4% and 34.5% for respective periods.

NBF's twelfth branch at Tawain in the Emirate of Fujairah commenced operations in April 2008.

About National Bank of Fujairah

National Bank of Fujairah started operations in 1984 in the Emirate of Fujairah. Its key shareholders include the Government of Fujairah (39%) and the Government of Dubai (10%). It is primarily a corporate bank with strong trade finance expertise, and rapidly growing businesses in Wealth Management and SME financing. National Bank of Fujairah is currently deepening its product range by selectively expanding its retail banking services while continuing to build its core businesses. NBF's current branch network stands at 12.

NBF is listed on the Abu Dhabi Securities Market under the symbol "NBF".

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