National Bank of Fujairah PJSC (NBF) - Operating profit grows 12.9% reflecting the resilient performance and continued focus on quality core business growth
National Bank of Fujairah PJSC (NBF) is pleased to announce its results for the year ended 31 December 2016 in accordance with the approval received from the Central Bank of the UAE.
- Operating income experienced a growth of 8.7%. Net interest income and net income from Islamic financing and investment activities grew by 5.9%, fee based income by 12.4%, foreign exchange and derivatives income marked a growth of 12.5% and income from investments by 311.2% compared to 2015. This was a result of the Bank adopting a more proactive stance in the management of its liquidity, and seeking to mitigate recent margin compression in the local economy.
- Operating expenses increased by 1.5%, reflecting NBF’s ongoing efforts to enhance its operating platform, in particular key compliance systems and processes, and to provide a better experience for its clients. Cost-to-income ratio improved to 34.4% compared to 36.8% in 2015 on the back of operational efficiencies and disciplined cost management.
- Operating profit was AED 866.0 million compared to AED 766.9 million in 2015; a rise of 12.9%. Furthermore, fee to income ratio stood at 35.7% compared to 34.0% in 2015.
- The strong operating performance supported NBF’s prudent loan loss provisioning policy in response to the ongoing credit stress being experienced in the market. The bank recorded net impairment losses of AED 405.5 million compared to AED 208.1 million in 2015 proactively recognising and providing for problem accounts. The Bank’s NPL ratio was 4.95% compared to 4.72% as at 31 December 2015. Total provision coverage ratio stood at 101.3% compared to 107.7% as at 31 December 2015.
- NBF posted a net profit of AED 460.4 million compared to AED 558.8 million in 2015, depicting a decline of 17.6% after absorbing this exceptional level of provisions.
- Loans and advances and Islamic financing receivables of AED 22.8 billion were up 15.9% from AED 19.7 billion at 2015 year end.
- Customer deposits and Islamic customer deposits of AED 25.9 billion were up 20.0% from AED 21.6 billion at 2015 year end.
- Investments and Islamic instruments were up by 26.9% representing 5.01% of total assets up from 4.7% in 2015.
- Shareholders’ equity of AED 4.6 billion was up by 7.0% from 2015 year end.
- Strong capital adequacy and lending to stable resources ratios were maintained at 17.6% (Tier 1 ratio of 15.2%) and 86.1% respectively, well ahead of Central Bank’s minimum requirements. The bank continues to maintain one of the highest eligible liquid assets ratio at 23.3% and its Basel III Net Stable Funding Ratio stood at 103%, while its Liquidity Coverage Ratio was 182%.
- Return on average assets was 1.4% and return on average equity was 10.4%.
- A distribution of profits of 15% has been recommended in the form of cash dividends of 7.5% (2015: 7.5%) and bonus shares of 7.5% (2015: 7.5%) of the paid-up capital.
H.H. Sheikh Saleh Bin Mohamed Bin Hamad Al Sharqi, Chairman said:
“The Board is pleased with the resilient operating performance, robust liquidity, solid capital adequacy and healthy returns achieved this year. These all help to sustain the Group’s competitive position in the face of a difficult credit environment. Our core business, balance sheet strength and agile operating platform secure the foundation for our future progress, and position NBF well to deal with the rapidly changing economic and regulatory environment. The Board is confident about the Group’s opportunities as we move into 2017 with a clear strategy to reliably support quality businesses and our personal customers. We were honoured with a number of prestigious awards and endorsements through-out 2016, underscoring NBF’s long outstanding culture of service excellence and client partnership.”
“Taking into account the 2016 performance and the current market conditions, I, on behalf of the Board of Directors, am pleased to recommend a distribution of profits of 15.0% (2015: 15.0%) in the form of cash dividends of 7.5% (2015: 7.5%) and bonus shares of 7.5% (2015: 7.5%) of paid-up capital.
I want to place on the record the Board’s appreciation of the progress made by the Group and acknowledge NBF’s increasingly significant role in the development of Fujairah and the UAE. Finally, I would like to thank our customers and shareholders for their staunch support and our dedicated staff for their tremendous efforts in building the Group.”
H.E. Sir Easa Saleh Al Gurg, KCVO, CBE Deputy Chairman said:
“Our 2016 results underscore the Group’s efforts to deliver real value to our customers and to support them as a consistent, reliable and transparent partner. This has been clearly appreciated in a global environment experiencing such heightened unpredictability and change. Our segmented focus and comprehensive set of products and service channels coupled with our long-term sustainable business model helped us achieve consistent business and revenue growth in a subdued operating environment. We are confident that by maintaining a resolute focus on risk management, financial prudence and sustainability, effective execution and transparency, the Group will continue to make worthy progress over the coming years. Finally, I would like to thank our customers, all the staff at NBF and our shareholders for the support in making the NBF franchise, a success story.”
About National Bank of Fujairah PJSC:
Incorporated in 1982, National Bank of Fujairah PJSC (NBF) is a full services corporate bank with strong corporate and commercial banking, treasury and trade finance expertise as well as an expanding suite of personal banking options and Shari’a compliant services. Leveraging its deep banking experience and market insight within Fujairah and the UAE, NBF is well-positioned to build lasting relationships with its clients and help them achieve their business goals.
NBF's key shareholders include the Government of Fujairah, Easa Saleh Al Gurg LLC and Investment Corporation of Dubai. Rated Baa1 / Prime-2 for deposits and A3 for counterparty risk assessment by Moody's and BBB+ / A-2 by Standard & Poor's, both with a stable outlook, the bank is listed on the Abu Dhabi Securities Exchange under the symbol "NBF". It has a branch network of 16 across the UAE.