UAE’s Largest Bank FAB Delivers Record Profits and 75 Fils Dividend Despite Market Challenges

Last year, UAE’s FAB made many impressive achievements due to record-breaking business volumes, successful diversification, and innovation.

The largest bank in the United Arab Emirates (UAE), FAB, which is also called First Abu Dhabi Bank, made Dh19.9 billion in profit before taxes due to its strong 15% increase in sales. The Abu Dhabi bank plans to pay 75 fils (one dirham is divided into 100 fils) per share in 2024.

The FAB Chairman, National Security Advisor, and Deputy Ruler of Abu Dhabi, Sheikh Tahnoon Bin Zayed Al Nahyan, stated that this is a Dh8.3 billion dividend pay-out. Last year, FAB made many impressive achievements due to record-breaking business volumes, successful diversification, and innovation.

FAB’s income for 2024 was Dh31.62 billion, a 14% increase from Dh27.75 billion in 2023.

The net profit was more than Dh17 billion compared to Dh16.4 billion.

London Stock Exchange Group (LSEG) data shows that net profit rose 4% to 4.2 billion dirhams ($1.14 billion) in the fourth quarter from 4.01 billion dirhams last year, more than analysts mean estimate of 4 billion dirhams.

The shares had dropped 0.7%, underperforming a 0.3% decline in Abu Dhabi‘s benchmark index.

Group CEO Hana Al Rostamani stated that their strategy helped to expand their international brand, diversify growth across all client categories and revenue streams, and increase foreign revenue by 32%. It also resulted in robust results in the United States of Emirates, in the thriving home market.

The non-UAE income growth will be favourable for FAB. Last year, they accounted for 23% of group revenue. It is an increase from 20% in 2023 and 18% in 2021.

The net impairment charges reached Dh3.92 billion, increasing from Dh3.07 billion last year. Despite having a higher interest rate, FAB’s net interest income grew by 8% yearly to Dh19.61 billion. The non-interest income contributed another Dh12 billion.

Non-performing loans were at Dh18.5 billion by the end of 2024, which resulted in a non-performing loan (NPL) of 3.4%, down from 3.9% the year before.

It shows effective risk management and the bank’s proactive strategy to optimize its balance sheet, led by the successful sale of non-performing loans in the last quarter.

That helped the net interest margin (NIM) to increase by 13 basis points to last year, reaching a five-year peak of 1.93%.

Lars Kramer, the CFO of FAB, stated that their strong balance sheet, resilient NIM profile, and diverse business model helped them to grow profitably and meet their return objectives.

EFG Hermes banking analyst Shabbir Malik noted in a report that earnings were aligned with their expectations as lower tax led to higher-than-expected provisioning that was due to the new provision regulation.

FAB, whose top shareholder is Abu Dhabi wealth fund Mubadala, stated that net impairment charges increased 27% last year due to robust provisioning levels and a changing regulatory environment.

The trends were consistent with the local competitors as Abu Dhabi Islamic Bank (ADIB) indicated a cautious increase in provisioning by 4% in 2024 than last year. But, Abu Dhabi Commercial Bank (ADCB) saw its fourth-quarter net impairment nearly double that last quarter due to new credit risk management rules by the UAE Central Bank.

FAB reported an increase in net profit of 4% to 17.1 billion dirhams and suggested a cash dividend of 0.75 dirhams per share, slightly higher than 0.71 dirhams for 2023.

UAE banks have benefited from the Gulf growth prospects as regional governments invested in non-oil industries to diversify their economies.

FAB net loans, advances, and Islamic financing had a 9% increase to 529 billion dirhams in 2024, outpacing the growth of deposits, which increased by 3% to 782 billion dirhams. The total assets increased 4% to 1.21 trillion dirhams.has context menu