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National Bank of Fujairah PJSC (NBF) – H1 2020 Results

NBF posted an operating income of AED 755.6 million and net profit of AED 65.1 million after building prudent impairment provisions in response to protracted period of disruptions caused by COVID-19

NBF’s solid liquidity and capital position coupled with proactive balance sheet and cost management places it in a strong position to navigate the current uncertain environment with confidence.

NBF is pleased to announce its results for the six month period ended 30 June 2020.


  • Operating income stood at AED 755.6 million down 10.2% compared to AED 841.5 million in the corresponding period of 2019 despite the dramatic economic slowdown resulting from the pandemic and consequent lockdown. The operating performance reflects the substantial downward pressure on margins and slowdown in economic activities mitigated by management action to protect the core business. Net interest income and net income from Islamic financing and investment activities and net fees, commission and other income stood at AED 511.9 million and AED 156.7 million respectively compared to AED 563.3 million and AED 198.4 million in the corresponding period of 2019. Foreign exchange and derivatives income reached AED 68.9 million compared to AED 74.2 million in the corresponding period of 2019. Income from investments and Islamic instruments marked a significant bounce back from the corresponding period of 2019 to AED 18.1 million during the six month period ended 30 June 2020.
  • Operating expenses reduced by 14.7% to AED 234.2 million compared to AED 274.5 million in the corresponding period of 2019, reflecting the measures adopted in line with the changing market demands and the significant move towards the use of digital solutions to maintain the bank’s exceptional customer service. The cost-to-income ratio improved to 31.0% from 32.6% in the corresponding period of 2019.
  • NBF achieved an operating profit of AED 521.4 million for the half year ended 30 June 2020 compared to AED 567.0 million in the corresponding period of 2019. 
  • NBF maintained its policy of prudent and transparent recognition of problem accounts and has also taken the opportunity to enhance net impairment losses in response to the potential impact of COVID-19 and current market conditions. NBF secured net impairment provisions of AED 456.3 million for the six month period compared to AED 209.9 million in 2019. During the six month period ended 30 June 2020, the bank’s impairment reserve reduced by AED 66.5 million to AED 296.6 million following the resolution of a number of difficult cases. Total provision coverage ratio (including impairment reserves) stood at 79.6% compared to 107.3% as at 31 December 2019. The NPL ratio stood at 7.5% compared to 6.7% as at 31 March 2020 and 5.4% as at 31 December 2019.
  • NBF posted a net profit of AED 65.1 million for the six month period ended 30 June 2020, down 81.8% compared to AED 357.1 million in the corresponding period of 2019 after absorbing the elevated level of provisions required to absorb the current exceptional market conditions. While, NBF’s other comprehensive income for the three month period ended 30 June 2020 increased by AED 71.4 million on the back of improvement in investments designated as fair value through other comprehensive income (FVOCI).
  • Loans and advances and Islamic financing receivables stood at AED 26.4 billion compared to AED 27.1 billion at 2019 year-end and AED 27.9 billion as at 30 June 2019. High quality liquid assets stood at AED 8.1 billion compared to AED 7.9 billion at 2019 year end and AED 7.3 billion as at 30 June 2019. This reflects our on-going prudent balance sheet, credit and liquidity risk management.
  • Customer deposits and Islamic customer deposits increased by 3.1% reaching AED 32.9 billion compared to AED 31.9 billion at 2019 year end, up by 6.2% from 30 June 2019. Current and Saving Accounts (CASA) deposits increased by AED 590.6 million from 2019 year-end, a 6.1% increase to AED 10.3 billion as at 30 June 2020. CASA deposits improved to 31.2% of total customer deposits compared to 30.3% as at 31 December 2019.
  • Total assets rose by 3.9% to reach AED 44.5 billion from AED 42.8 billion at 2019 year-end, up by 4.6% from 30 June 2019.
  • Shareholders’ equity stood at AED 6.2 billion compared to AED 6.4 billion at 2019 year end, up by 15.0% from 30 June 2019. The capital adequacy ratio stood at 18.6% (Tier 1 ratio of 17.4% and CET 1 ratio of 13.6%) compared to 17.8% (Tier 1 ratio of 16.6% and CET 1 ratio of 12.9%) at 2019 year-end, significantly ahead of regulatory requirements.
  • Strong liquidity was maintained with lending to stable resources ratios at 78.5% (2019: 85.9%) and eligible liquid assets ratio (ELAR) at 21.3% (2019: 21.7%), well ahead of all CBUAE minimum requirements.
  • Return on average assets was 0.3% compared to 1.7% for the corresponding period in 2019.
  • Return on average equity was 2.1% compared to 13.6% for the corresponding period in 2019.

Dr Raja Al Gurg, Deputy Chairman said:

“H1 2020 witnessed unprecedented disruption adding to the challenges already being faced by the global economy with lock-down, supply-chain disruptions, stocks and commodity price volatility, interest rate cuts and consequent credit stress all creating extreme negative pressures on the business environment. The UAE banking industry continues to face pronounced risks, including asset quality concerns, rising cost of risk, slowdown in economic activity and margin pressures. Against this current uncertain environment, NBF has been functioning without a break to support its customers through various measures and remains responsive to their ever-changing needs. Not only has the bank been an early user of the UAE government’s initial support measures, we have also adopted more accommodating policies where appropriate, above and beyond such schemes, to assist and provide relief to its eligible customers, forgoing short term profit for the longer term benefit of the economy.

Our H1 2020 results evidence the Group’s resilience and adaptability to respond to extreme situations effectively and to protect the interests of its stakeholders.

Our balance sheet remains solid with strong liquidity and capital ratios, and we are confident that our prudent business model and governance standards will continue to steer the Group through the careful management of the opportunities and challenges that will present themselves in the rest of the year. NBF’s timely focus on digitisation and automated channels have considerably facilitated remote working practices, increased our productivity and helped reduce our cost base. Despite the current challenges, the bank continues to invest in its future and continues to develop its focus on providing reliable and trustworthy customer service supported by a strong technical understanding of our customers’ needs.”

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 negative outlook, the bank is listed on the Abu Dhabi Securities Exchange under the symbol “NBF”. It has a branch network of 19 (of which 2 are electronic banking service units) across the UAE.

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