DUBAI: Banks profits in the UAE hit new record highs yesterday as First Gulf Bank (FGB) and National Bank of Abu Dhabi reported to have net profits of Dh5.66 billion and Dh5.57 billion respectively in 2014.
While 2014 is marked as the 15th consecutive year of profit growth for FGB, Dubai based Commercial Bank of Dubai (CBD) reported Dh1.2 billion net profit marking sixth year of continuous profit growth.
Decline in provisions, strong growth in non-interest income streams and improved asset quality were underlying drivers for all three banks.
FGB’s non-interest income grew 14 per cent in 2014 driven by strong core fee and commission revenue streams and higher foreign exchange and derivative income.
NBAD’s net interest income (NII) including income from Islamic financing was up 8 per cent Dh7.018 billion in 2014. Non-interest income grew 18 per cent to Dh3.39 billion last year as net fees and commission income grew 25 per cent to Dh2.31 billion in 2014.
CBD’s interest income grew 9.3 per cent while non interest incomes were up 12.5 per cent.
UAE lenders have been recording higher profits on the back of robust local economic conditions. Substantial reductions in provisions and strong asset quality matrices have supported the bottom lines.
NBAD’s net impairment charges for full year were Dh868 million, reflecting a decline of Dh338 million or 28 per cent.
“NBAD reported robust growth in bottom-line mainly due to strong growth in net and non-interest income and a decline in provisions,” said Naveed Ahmed, Senior Manager, Research Group Global Investment House.
FGB’s asset quality metrics continued to improve last year with the non performing loans (NPL) ratio at 2.5 per cent in 2014 from 3.3 per cent in the previous year. In parallel, NPL provision coverage was significantly enhanced to 126.7 per cent.
CBD’s impairment provisions net of recoveries fell from Dh395 million booked during 2013 to Dh283.7 million in 2014. Overall asset quality continued to improve with the NPL ratio dropping from 10.1 per cent at the end of 2013 to 9.2 per cent in 2014.
