(WAM) — First Abu Dhabi Bank, FAB, reported AED2.5 bn for Q3-2020, 4 percent up on Q2, with net profit for the first nine months of 2020 standing at AED7.3 billion, 22 percent lower compared to the same period in 2019, mainly due to higher impairment charges and softer revenue, partly mitigated by cost optimisation.
This came in a statement by the Bank today where it reported he financial results for the nine-month period ended 30 September 2020.
“Following a resilient first, the bank delivered solid results in the third quarter of 2020, reflecting a rebound in economic activity, a healthy business momentum across Corporate and Investment Banking, CIB, and Personal Banking, PBG, and effective management actions in response to the current environment. Group net profit for the third quarter of 2020 was AED2.5 billion, a 4% increase from the second quarter. Net profit for the first nine months of 2020 was AED7.3 Billion, 22% lower compared to the same period in 2019, mainly due to higher impairment charges and softer revenue, partly mitigated by cost optimisation. The Bank continued to demonstrate balance sheet strength through improved liquidity, funding, and capital ratios. Asset quality remained resilient underpinned by diligent risk management and a conservative risk profile, supported by the relief measures under the UAE Central Bank Targeted Economic Support Scheme, TESS, programme.”
André Sayegh, Group Chief Executive Officer, FAB, said: “FAB delivered a resilient performance in the first nine months of 2020, successfully managing key risks in the face of unprecedented economic and market conditions. With total assets almost reaching the AED 1 Trillion mark as of September-end 2020, our robust foundation enabled us to continue to support our clients, and to benefit from the gradual rebound in economic activity and market sentiment. Leveraging our competitive strengths, we were proud to lead prominent transactions for our clients in the third quarter, and to continue to support trade and investment flows across the region.
“We continued to accelerate our digital initiatives across the Group. A specific focus was enhancing our customer facing channels, finalising key digitally-led partnerships, and enhancements in payments and merchant services. Our new partnership with ADQ and its future digital bank also represents a new milestone for us, as part of our commitment to support Abu Dhabi’s digital ambitions. Internally, our digital-first mind-set has allowed us to adopt flexible working policies at FAB and we will continue to look into how we can evolve our operations to best meet our stakeholders’ needs.
“I am proud of our achievements so far this year, as we continued to demonstrate resilience, while making significant progress against our strategic agenda, and supporting the government’s important relief and stimulus measures. In recognition for our strong profile, we were once again ranked as the Middle East’s Safest Bank by Global Finance, and improved on our ranking as the 16th Safest Commercial Bank globally from 22nd last year. The publication also named us the “Best Bank in the UAE” and we were honoured as the “Investment Bank of the Year for Emerging Markets in the Middle East” by the Banker, amongst a number of other prominent accolades.
“I would like to thank all our partners and stakeholders for their continuous support. We are grateful for the guidance received by the UAE’s leadership, our Chairman H.H. Sheikh Tahnoun bin Zayed Al Nahyan and our board members and senior management team. I also want to thank our customers and shareholders for their trust in us, and our employee for putting the customer first and working flexibly to maintain a seamless service. Looking ahead, we will continue to play a key role in supporting the UAE’s economic recovery, and we remain confident in our ability to navigate the evolving environment, and to deliver sustainable shareholder returns.”
James Burdett, Group Chief Financial Officer, FAB, said: “The Group delivered a net profit of AED 2.5 Billion in the third quarter of 2020, up 4 percent sequentially, marking our strongest quarterly performance this year. While we continued to face headwinds from low interest rates and the challenging environment brought about by the ongoing pandemic, this was offset by higher fee-based income reflecting a rebound in business activity with sales volumes in PBG returning to pre-COVID levels, and strong results from our continued focus on cross-sell and revenue diversification.
“Our CIB business performed particularly well with underlying revenue growth underpinned by the execution of landmark deals for our core clients in the UAE and MENA, as well as strong client engagement across our franchise driving higher income from Global Market sales. Reflecting strong cost discipline, operating expenses improved 7 percent year-on-year amidst ongoing investments in key strategic and digital initiatives designed to enhance productivity and create future efficiencies. While we continued to build prudent provisions against our portfolio, we benefitted from the partial resolution of a large corporate account which resulted in lower impairment charges sequentially. With a CET1 ratio at 14.0 percent, our capital position is strong and comfortably above regulatory requirements.”