NBF closes half-year with AED 153.5 million net profit
Impressive performance buoyed by ‘better than ever’ core operating income growth of 40.5%
National Bank of Fujairah has announced its half year results for the period ended 30 June 2008 recording a profit of AED 153.5 million. The half year result was AED 0.9 million above the corresponding half year profit in 2007, but NBF's strong core business performance coupled with the appreciation of investment fair values, helped bridge a 31% deficit in the first quarter earnings of 2008.
"Our earnings from core business areas are better than ever, especially the progress we have made with foreign exchange and fee income. We have brought our Commercial Banking Business (formerly SME) together with Corporate Banking under the single umbrella of Wholesale Banking and that area continues to perform well." said Steve Mullins, CEO.
"The net results for the first quarter were impacted by the global investment climate, causing a significant decline in the fair value of the bank's investment portfolio. We said at the time that we expect a recovery in investment fair values and this has proven to be the case," added Mullins.
For the half year, core operating income, excluding investment fair values, showed a growth of 40.5% compared to the corresponding half of 2007. Core businesses maintained strong growth on the back of a robust growth in volumes despite pressure on margins due to excess domestic AED liquidity and lower inter-bank interest yields. Net interest income rose by 34.0% and fee income grew by 43.5%. Foreign exchange income doubled to AED 19.6 million compared to the corresponding half of 2007. Operating expenses increased by 27.9% largely due to investment in governance and infrastructure and strengthening of human capital.
Total assets grew by 32.3% over 30 June 2007 to AED 12.5 billion. Total shareholders' equity as of 30 June 2008 stood at AED 1.8 billion and the bank's capital adequacy ratio at that date stood at 12.9% against the Central Bank minimum of 10%. NBF has also obtained approval from the UAE Central Bank for a Tier 2 capital issue later this year.
Capital Intelligence has recently upgraded NBF Foreign Currency Long-term rating from BBB+ to A- with a Stable Outlook while maintaining the Foreign Currency Short-term rating at A2, Financial Strength BBB+ and enhancing the Support rating from 3 to 2.
NBF received two awards in Q2. At the 6th Annual Trade Finance Awards in London, NBF was honoured for its AED 72 million online Dubai Commodity Receipt deal which was recognised as the most innovative structured transaction of 2007. NBF was also awarded a Golden Category Award by Securities and Commodities Authority for timely disclosures during 2007.
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 Commercial Banking. 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".