Abu Dhabi, UAE – October 2024:
First Abu Dhabi Bank (FAB), the UAE’s largest lender, posted a net profit of AED 4.46 billion ($1.2 billion) for the third quarter of 2024, marking a 5% year-on-year increase. This growth was driven by robust revenue expansion, which helped offset a sharp rise in impairment charges. The results exceeded analysts’ expectations, with the net profit comfortably beating the AED 4.06 billion forecast, according to data from LSEG.
FAB’s operating income for the quarter reached AED 8.20 billion, an 18% rise compared to the same period in 2023. However, the bank faced significantly higher impairment charges, which surged by 50% year-on-year to AED 909 million. Additionally, operating expenses grew 9% to AED 1.98 billion.
The bank’s net interest margin (NIM), a critical measure of profitability, stood at 1.89% for the quarter. This figure represented a 7-basis-point (bps) decline compared to the previous quarter and an 8-bps drop year-on-year. FAB attributed this dip in NIM to the combined impact of higher cash reserve requirements, increased central bank placements, and the UAE Central Bank’s 50-bps benchmark rate cut during the period.
For the first nine months of 2024, FAB reported a cumulative net profit of AED 12.9 billion, reflecting a 4% year-on-year increase. Total assets grew by 5% year-to-date and 4% year-on-year, reaching AED 1.2 trillion, according to the bank’s regulatory filing on the Abu Dhabi Securities Exchange (ADX).
Despite the challenges posed by higher impairment and operating expenses, FAB’s strong revenue growth underlines its solid financial position and operational resilience in the face of evolving market conditions.
