First Abu Dhabi Bank (FAB), UAE's largest bank, reported Wednesday a group net profit of nearly $3 billion (AED 10.9 billion) for the first nine months of the year, with a whopping 19% increase year-on-year (YoY). This was supported by higher revenue on rising interest rates, coupled with lower provision charges, despite global markets continuing to be under significant downward pressure. FAB's net profit leaped to nearly $3 billion (AED 10.9 billion), or 35 cents per share, for the first nine months of 2022. It also jumped 12% quarter-on-quarter (QoQ) in the third quarter of 2022 to $800 million (AED 2.9 billion), excluding gains recorded in the second quarter from the sale of the bank's stake in payment solutions company Magnati, despite falling 14% from the same quarter last year.
The bank's total revenue rose 13% YoY to $4.9 billion (AED 18 billion) for the first nine months of the year, led by higher net interest income which jumped 18% to $2.77 billion (AED 10.18 billion). The increase in total revenue includes an $840 million (AED 3.1 billion) net gain on the sale of the bank's stake in Magnati.
The total revenue of UAE's largest bank was up 4% QoQ in the third quarter of the year to $1.5 billion (AED 5.49 billion), driven by higher interest and non-interest income. However, it fell 14% from the same quarter last year.
Net impairment charges stood at $470 million (AED 1.7 billion) for the nine months ended September 30, down 11% YoY, and implying an annualized cost of risk at 52 basis points improving from 65 basis points in the same period last year. For the third quarter, the charges were at nearly $189 million (AED 694 Million), 13% lower YoY, and up 19% QoQ as the bank continued to strengthen its provision buffers.
For the first nine months of the year, operating costs were up 6% YoY at (AED 4.7 billion), up 8% YoY, reflecting ongoing investments. However, in the third quarter, they were only up 1% QoQ and 1% YoY to $440 million (AED 1.6 billion). "Looking ahead, the increasingly challenging global backdrop calls for caution, with recessionary risks looming over several economies," said Hana Al Rostamani, Group CEO, in a statement.
"As we navigate these headwinds, we are nevertheless confident in the resilience of this region, and we remain very well placed to deliver market-leading shareholder returns while being an engine for the region’s economic growth and diversification.”
