NBF posts an encouraging set of results with profit growth of 17.1%

National Bank of Fujairah (NBF) is pleased to announce its results for the six-month period ended 30 June 2021. NBF posted a net profit of Dhs76.2 million for the six month period ended 30 June 2021, an increase of 17.1 per cent over the corresponding period of 2020, which exhibits its resilient business strategy. The net profit was up 430.8 per cent for the three month period ended 30 June 2021 compared to the corresponding period of 2020.

 NBF achieved an operating profit growth of 11.3 per cent for the three month period ended 30 June 2021 over the corresponding period of 2020; and 2.3 per cent compared to Q1 2021, demonstrating the on-going recovery phase. Operating profit stood at Dhs502.0 million for the six month period ended June 30, 2021 compared to Dhs521.4 million in the corresponding period of 2020.

 Operating income growth of 7.8 per cent was recorded for the three month period ended 30 June 2021 over the corresponding period of 2020; and 1.1 per cent compared to Q1 2021. Operating income stood at Dhs724.5 million for the six month period ended June 30, 2021 compared to Dhs755.6 million in the corresponding period of 2020, reflecting gradual recovery from the challenging operating environment presented by the COVID-19 pandemic from Q2, 2020.

Net interest income and net income from Islamic financing and investment activities grew 2.5 per cent in the three month period ended 30 June 2021 over the corresponding period of 2020; and 6.1 per cent compared to Q1, 2021.

Net interest income and net income from Islamic financing and investment activities stood at Dhs 469.1 million for the six month period ended 30 June 2021 compared to Dhs 511.9 million in the corresponding period of 2020.

Net fees, commission and other income rose 6.1% to Dhs 166.2 million for the six month period ended 30 June 2021 compared to Dhs 156.7 million in the corresponding period of 2020. It was up 30.4% for the three month period ended 30 June 2021 compared to the corresponding period of 2020; and up 12.1% compared to Q1, 2021.

Foreign exchange and derivatives income reached Dhs 54.6 million for the six month period ended 30 June 2021 compared to Dhs68.9 million in the corresponding period of 2020.

Income from investments and Islamic instruments marked a substantial improvement to Dhs34.6 million during the six month period ended June 30, 2021 compared to the corresponding period of 2020. Unrealised gain on fair value through other comprehensive income (FVOCI) investments stood at Dhs68.9 million.

Operating expenses reduced by 5.0 per cent to Dhs222.6 million compared to Dhs234.2 million in the corresponding period of 2020, demonstrating the measures adopted in line with the changing market conditions and our focus on exceptional customer service through digital adoption and innovation. Cost-to-income ratio marginally reduced to 30.7 per cent compared to 31.0 per cent in the corresponding period of 2020 reflecting the lower operating income.

NBF maintained its policy of prudent and transparent recognition of problem accounts. NBF secured net impairment provisions of Dhs425.7 million for the six month period ended June 30, 2021, down 6.7 per cent compared to Dhs456.3 million in the corresponding period of 2020. During the period, the bank’s impairment reserve reduced to Dhs270.2 million compared to Dhs283.5 million as at Dec.3, 2020.

Total provision coverage ratio (including impairment reserves) stood at 93.8 per cent compared to 91.8 per cent as at Dec.31, 2020. The NPL ratio stood at 10.0 per cent compared to 10.1 per cent as at 31 Dec.31, 2020. Excluding a few exceptional group exposures, the NPL ratio would reduce to 6.8 per cent.

 The capital adequacy ratio (CAR) is being kept at a recent high for the bank to support the bank’s ability to ride out any challenges arising out of the evolving operating landscape. CAR stood at 19.6 per cent (Tier 1 ratio of 18.4 per cent and CET 1 ratio of 14.3 per cent) compared to 19.2 per cent (Tier 1 ratio of 18.1 per cent and CET 1 ratio of 14.0 per cent) at 2020 year-end.

 Loans and advances and Islamic financing receivables rose by 1.7 per cent to reach Dhs25.3 billion compared to Dhs24.8 billion at 2020 year-end and Dhs26.4 billion as at June 30, 2020.

 Investments and Islamic instruments stood at Dhs4.9 billion compared to Dhs5.2 billion at 2020 year-end and Dhs4.0 billion as at 30 June 2020 evidencing the deployment of a portion of excess liquidity towards the high quality investment book to protect shareholder value.

 Customer deposits and Islamic customer deposits stood at the 2020 year-end level of Dhs 29.8 billion compared to Dhs 32.9 billion as at 30 June 2020. CASA deposits improved to 40.6 per cent of total customer deposits compared to 38.0 per cent as at 31 December 2020 and 31.2 per cent as at 30 June 2020. Current and Saving Accounts (CASA) deposits increased by Dhs805.2 million to reach Dhs12.1 billion compared to Dhs11.3 billion as at 31 December 2020 cushioning the impact from the lower interest rates.