FGB annual earnings jump 18% in '14, revenue up 10%.
Lender's net interest and Islamic financing income rise 8%
Abu Dhabi -- With a record breaking net profit of Dh5.66 billion in the year 2014, Abu Dhabi's FGB has emerged the biggest lender in terms of earnings.
The lender showed an 18 per cent rise in its net profits for the year ended December 31, 2014, the bank said in a regulatory filing to Abu Dhabi Securities Exchange. The lender's solid performance is attributed to a continued focus on ensuring disciplined growth while leveraging the strengths of its reshaped business model. Positive growth momentum was witnessed across all lines of business due to ongoing diversification, continued cost control, and a disciplined risk approach.
FGB, the largest lender by market capitalisation, showed a 10 per cent year-on-year growth in revenues to Dh9.24 billion for 2014. Net interest and Islamic financing income grew by eight per cent to Dh6.47 billion. As expected, surplus liquidity in the UAE banking system and increasing competition put pressure on net interest margins (NIMs) throughout 2014.
Loans and advances reported double-digit growth of 11 per cent to Dh139.7 billion in 2014; customer deposits were up two per cent year-on-year to Dh141.3 billion; while assets reached Dh212.2 billion in the year.
Abdulhamid Saeed, FGB's managing director, said: "Despite rising market volatility caused by falling oil prices, FGB shares continued to outperform major indices and benchmarks." FGB's board of directors recommended the distribution of a cash dividend of 100 per cent and 15.38 per cent bonus shares for the financial year ended December 31, 2014. The lender enjoys strong capital position with total Capital Adequacy Ratio at 17.5 per cent and Tier 1 Capital at 16.2 per cent after dividend distribution
Andre Sayegh, chief executive officer of FGB, said: "2014 was an important turnaround year for FGB as the bank started reaping the benefits of its new business model in line with the strategy laid out almost two years ago. Much focus has been put into enhancing our product range, introducing greater specialisation across our core business segments, and implementing stronger cross-business synergies. We are looking ahead with confidence and optimism."
The chief executive added that the UAE economy was fundamentally solid enough to absorb the impacts of acute volatility in the commodities market, even in the case of a prolonged downturn. The competitiveness and strength of the UAE economy go far beyond the price of a barrel of oil, he said.
"Ample reserves, a strong regulatory framework, and a robust and fast growing non-oil economy are here to support and reaffirm the UAE's position as an unrivaled economic hub in this region," Sayegh noted.
The chief executive also said that the important milestones achieved in 2014, coupled with medium term strategic roadmap, will help ensure that FGB's success story is a sustainable one as the bank continues to turn challenges into opportunities in an ever-evolving operating environment.
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