NBF announced that it had posted strong results for the 2006 financial year. The bank posted consolidated net income of AED 237.6 MIO, up 35% from the previous year's profit of AED 175.8 MIO
The bank consolidated its annual results for the first time with its wholly owned brokerage subsidiary, NBF Securities LLC which commenced operations on 21st May 2006.
Commenting on the results, H H Sheikh Saleh Bin Mohammed Al Sharqi, Chairman of NBF noted "We are very pleased with our results that have been achieved on sustainable income streams. This is the third consecutive year of growth in excess of 35% per annum and affirms that our medium term growth strategy is on target".
The Bank posted an impressive growth on the back of strong and sustainable volumes in core business areas, despite being affected by underperformance of domestic investment portfolio due to the significant downturn seen in domestic securities market. Total assets and liabilities grew by 37.37% and 44.05% to AED 8.63 billion and AED 7.05 billion respectively. Net interest income rose by 42.73% over 2005 reflecting quantum growth in volumes.
Commenting further on the results, Asad Ahmed, General Manager, noted "Our core corporate and treasury businesses have shown strong growth. The diversification of businesses that the bank has been progressively undergoing over the last three years, such as our SME banking and Wealth Management, are now beginning to have a positive effect. We intend to continue with this 'build and diversify' process in our commitment to retail and branch network expansion".
The Bank's investment portfolio, which has been built up progressively over a number of years with a two fold strategy of providing tiers of liquidity and yielding relatively higher returns, was strengthened by diversifying investments to certain international funds. The diversification provided a level of resistance against volatile domestic market.
General and administrative expenses increased by 15.82%. The increase in costs is mainly on account of employee related expenses, which reflects both the growing number of employees and the strengthening of management structure in line with the bank's aggressive growth plans including the initiative to enter into the Retail Segment.
Earnings per share increased to AED 0.24 this year from AED 0.19 in 2005 which have been restated to reflect the bonus issue and share split made during 2006. Return on average equity rose from 14.83% in 2005 to 16.04%. Total shareholders' equity as of 31 December 2006 stood at AED 1,576 m and the bank's capital adequacy ratio at year-end remained healthy at 18.94% against the Central Bank minimum of 10%.
In view of the exceptional performance of the bank, the Board of Directors will be recommending to the shareholders that profits be distributed by way of bonus shares of 10% and a cash dividend of 10%.
The figures and proposals are subject to audit finalization and approvals from relevant authorities.
About National Bank of Fujairah
National Bank of Fujairah (NBF) (www.nbf.ae) was established in 1982 in Fujairah, United Arab Emirates. Its key shareholders include the Government of Fujairah and the Government of Dubai.
The existing branch network is composed of ten branches throughout UAE, with plans to increase the number of branches up to 13 by the end of 2007. NBF is listed on the Abu Dhabi Stock Market under the symbol "NBF".