National Bank of Fujairah PSC (NBF) returns to profitability with a net profit of AED 104.3m for 2009

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National Bank of Fujairah PSC (NBF) is pleased to announce its results for 2009 which are being submitted for Central Bank’s approval.

Highlights:

• NBF recorded profit of AED 104.3 million compared to a loss of AED 50.3 million in the same period last year
• Results reflect the strength of core customer base and were achieved despite difficult credit conditions during the year
• Additional loan loss provision of AED 214.3 million made in 2009
• Investment income of AED 37.6 million compared to a loss of AED 227.0 million in the same period last year
• Strong capital adequacy and advances to deposits ratios at 22.4% (Tier 1 Ratio: 14.2%) and 78.3% are well ahead of Central Bank minimum requirements
• Total assets of AED 11.9 billion and total shareholders’ equity of AED 1.7 billion

Sheikh Saleh Bin Mohammed Al Sharqi, Chairman of NBF commented:  “This is a solid set of results in one of the most challenging economic environments we have ever seen. Following the full year loss in 2008, these results mark a welcome return to profitable operations. The Bank will continue its prudent approach in these unprecedented market conditions and will pursue selective opportunities for achieving steady growth and adding value for its shareholders.”

Sir Easa Saleh Al Gurg, Deputy Chairman of NBF commented: “The Bank’s progress amidst the global financial crisis is a testament to its prudent & balanced approach to these challenging times . The Bank has grown its core earnings which, coupled with the recovery of the investment portfolio, helped in absorbing credit losses and maintaining profitable operations. The Bank’s liquidity and capital adequacy ratios are strong and the build-up in provisioning levels has enabled the bank to face uncertain credit conditions in the Gulf with confidence.”
 

National Bank of Fujairah PSC (NBF) has recorded a net profit of AED 104.3 million for the year 2009. In the corresponding period in 2008, NBF made a loss of AED 50.3 million.

The loan impairment charge for the year is AED 214.3 million compared to a charge of AED 179.7 million in the corresponding period in 2008. The charge includes an amount of AED 73 million in respect of the Bank’s exposure of AED 92 million to the Al Gosaibi and Saad Groups of Saudi Arabia. The Bank continues to be prudent and proactive in providing for potential loan losses in view of uncertain conditions.

Operating income reduced to AED 506.5 million in comparison to the corresponding period in 2008 of AED 537.9 million reflecting the general slowdown in economic activity and higher cost of funds due to market conditions. The liquidity cost in the market continues to be at unprecedented levels and has had a negative impact on net interest income and profit.

In line with the Bank’s strategy, investment in funds was reduced to AED 56.6 million from AED 227.4 million as at the year end. The Portfolio saw some recovery and as a result, a gain on investment of AED 37.6 million was recognized through the statement of income, compared to a loss of AED 227.0 million for the corresponding period of 2008.

Total assets stood at AED 11.9 billion but down from AED 12.8 billion as at the year end. The reduction in the statement of financial position reflects subdued demand for credit in the corporate sector and the Bank’s prudent risk appetite.