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First Gulf Bank PJSC, (FGB), the leading UAE financial institution, announced today that it had posted record Net Profits of AED 4,154 million for 2012, an increase of 12% from 2011. The results were boosted by revenues for Q4’2012 at AED 2,006 million, the strongest quarterly revenue numbers ever recorded by the bank and the 12th consecutive year that FGB has recorded profit growth. The net profit of core banking activities against other subsidiaries of the group was split at 95% to 5%, in which the UAE businesses contributed 96% compared to 4% overseas.
Commenting on the bank’s strong performance in 2012, Andre’ Sayegh, CEO of First Gulf Bank said: “This strong financial performance is attributed to the solid foundation of First Gulf Bank, whereby the various bank businesses are dynamically aligned with market conditions. Our priority is to continue to manage a strong balance sheet, which results in achieving a solid profitability year after year. We are proud to state that over the past few years, FGB has been successful in building a power house of diversified and stable revenue generating businesses, while our overseas presence will gain an important momentum going forward. It is important to note that this strong performance is closely associated with prudent Risk Management across the bank.”
Q4’2012 income statement highlights
The Net Profit for FGB’s fourth quarter in 2012 was AED 1,149 million, an increase of 12% over Q4’2011, and 9% higher than Q3’2012.
Net Interest and Islamic Financing operations generated AED 1,470 million, thereby contributing to 73% of the Total Revenue. The remaining 27% of Total Revenue was generated through Corporate and Retail fees and commissions, Treasury and Investment Income and Income from Subsidiaries and Associate Companies.
Full year 2012 income statement highlights
FGB recorded a net profit of AED 4,154 million in 2012, 12% higher than the previous year. Revenue increased by AED 787 million, while expenses rose by AED 203 million and Provisions increased by only AED 100 million.
“One of the core pillars of our strategy remains diversifying our sources of revenue geographically and across different business sectors. This diversity in revenue streams has been a major factor in FGB’s strong results, aligned with the bank’s strong capital position and liquidity, providing the bank with a robust platform for future growth” Sayegh said.
Corporate, Retail and Treasury businesses all witnessed positive growth in Revenue during 2012 and contributed 38%, 41% and 11% each respectively to the Total Revenue sum. Net Interest and Islamic Financing grew by 9% during the year and Net Interest Margin was maintained at 3.7%.
FGB’s strategy of international expansion continued to yield positive results. The bank’s international branches in Singapore, India, Qatar and Libya generated AED 307 million in revenue, increasing by 163% compared to AED 116 million in 2011 and increasing by 339% from AED 70 million in 2010. International operations continue to show positive results with an important growth momentum planned for the future.
In line with FGB’s efforts to continuously build its capabilities and invest in its people, the bank’s expenses during the year increased by AED 203 million or 17%, resulting in a controlled cost to income ratio of 19.6%. In addition to hiring new talent for the organisation, expenses notably covered training schemes and initiatives, such as the recently launched the FGB Business School, which aims to promote best practices within the banking sector in the UAE. The FGB Business School offers tailored solutions to meet the professional requirements of FGB’s businesses, resulting in enhanced skills, and supporting employees’ career growth.
Strengthening the bank’s products, its sales force, the International expansion and investing in technology enhancements accounted for further cost increases.
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