FAB achieves record results in first nine months of 2023

First Abu Dhabi Bank (FAB) has achieved record performance in the first nine months of 2023. Net profit for the period reached AED 12.4 billion, up 58% year-on-year on an underlying basis (excluding Magnati-related gains in 2022), and revenue was AED 20.5 billion, up 38% year-on-year, reflecting the successful and sustained execution of the bank’s growth strategy. Return on tangible equity improved to 18.3%. Net profit for the third quarter of 2023 increased by 46% to AED 4.3 billion, the highest ever on an underlying basis, with revenue up 27% to AED 7.0 billion.

Hana Al Rostamani, Group Chief Executive Officer of FAB, said: “In the third quarter of 2023, we achieved solid results contributing to a record net profit of AED 12.4 billion for the first nine months of 2023, a 58% surge year-on-year on an underlying basis. In addition, group revenue exceeded AED 20 billion. FAB’s reaffirmed superior credit ratings of AA- (or equivalent), our international and diversified franchise, our financial strength and ample liquidity, are among the distinct competitive strengths that position us well to continue our steady progress towards our strategic goals. 

With climate finance being a critical factor in climate progress, FAB is making strides on multiple fronts including supporting energy transition and providing green financing, in addition to minimising its own footprint and spearheading change across the region. FAB was the first GCC bank to join the industry-led UN-convened Net Zero Banking Alliance (NZBA). As a leading voice in the regional financial sector relating to sustainability, we are fully aligned with the ambitions of Abu Dhabi and the UAE to deliver a sustainable future for all. This is underscored in our strategic pathway partnership with COP28 as well as in our commitment to net-zero emissions by 2050.

“As the markets strengthen their trade flows and form broader economic partnerships across the globe, FAB’s international franchise ensures that we continue to play our unique role as a facilitator of global trade and investment”.

Lars Kramer, Group Chief Financial Officer at FAB, said: “FAB produced another strong set of results in the third quarter of 2023, delivering double-digit growth in revenue and bottom line and building on the core growth momentum achieved since the start of the year. Return on Tangible Equity for the first nine months of 2023 improved to 18.3%, with Group CET1 reaching 14.2% as of September 2023 underlining strong capital accretion. Operating income grew 38% year-on-year from continued expansion in net interest income coupled with growth from diversified revenue streams, demonstrating our ongoing strategic focus on deepening client relationships across our global franchise. 

In addition to that, FAB aims to facilitate USD 75 billion of sustainable finance projects by 2030 and has already funded more than USD 18 billion in 9M’23 and USD 27 billion to-date from the 2022 baseline. Green finance and sustainable finance are growth markets, and the upcoming COP28 forum will showcase our leadership in this area and accelerate our reach and capacity.

FAB’s growth was driven by its diversified franchise and business model. Total assets were approximately AED 1.2 trillion as the bank continued to power cross-border trade, economic growth, and the transition to a low-carbon future across its global network. Non-interest income grew 46% in 9M’23, contributing 35% to Group revenue, while international operations grew 31% year-on-year to contribute 19% to total Group revenue, reflecting the UAE’s position at the nexus of global trade and investments. 

Thanks to its robust fundamentals, FAB is well positioned to navigate the evolving environment and higher-for-longer interest rates. Despite ongoing transformational investment, the 9M’23 cost/income ratio remained healthy at 25.4%, reflecting positive jaws. FAB maintained strong capital generation and asset quality, further optimising its capital structure in October through an inaugural Tier 2 bond issuance the largest-ever conventional bond issuance from a MENA bank”.

Consistent growth strategy execution unlocking sustainable value for stakeholders

FAB’s ability to deliver on its strategic objectives is underpinned by its long-standing status as the region’s financial institution of choice. In supporting its client franchise across the Group’s global network with innovative products and solutions, FAB delivered further improvements in customer experience, leveraging technology and strategic partnerships. The bank affirmed its dominant position in Investment Banking, with revenues up 45% in 9M’23, driven by a strong deal pipeline execution across various areas, new client relationships, consistent growth in Current and Savings Accounts (CASA) balances, benefits from higher benchmark rates and a strong Global Markets performance. 

Service and product innovation continued at pace in key areas including fund administration, payments, securities services, private banking solutions and digital applications. This supported 9M’23 Consumer Banking revenue growth of 2%, with customer acquisition driven by the continued optimisation of the customer journey, as illustrated by multiple awards including the UAE’s Best Consumer Digital Bank, Mobile Banking App and User Experience Design at the Global Finance Digital Bank Awards, Best E-wallet at the Leaders in Fintech Awards 2023 by Entrepreneur Middle East, and Best Digital Wallet User Experience at the MEA Finance Banking Technology Awards. FAB was also ranked the ‘Safest Bank in the Middle East’, ‘Safest Bank in the UAE’ and the only MENA bank featured in the ‘World’s 50 Safest Banks’ as per the ‘Global Finance 2023 Safest Bank’ rankings.

Delivering on FAB’s sustainability agenda ahead of COP28 

FAB will continue to set the pace for sustainable finance, and is a strategic pathway partner of the 28th UN Climate Change Conference of Parties (COP28), which is being held in the UAE from 30 November to 12 December, 2023. FAB, which was the first GCC bank to join the Net Zero Banking Alliance (NZBA), arrives at COP28 as the region’s pioneer bank in sustainable finance, uniquely equipped to be its clients trusted financial partner on their journey to net-zero. In September, the bank announced its six-point COP28 agenda which includes accelerating the adoption of sustainable finance, supporting clients and partners to transition to net-zero, growing ESG awareness and adoption among SMEs and advancing effective carbon markets. 

Early in 2023, FAB became the first MENA bank to set financed emission reduction targets for 2030 across oil and gas, aviation, and power generation.

Selected financials for 9M’23

• Record Group net profit of AED 12.4 billion, up 58% year-on-year on an underlying basis; Q3’23 net profit at AED 4.3 billion, up 46%.
• 9M’23 revenue up 38% crossing AED 20 billion mark, reflecting strong business volumes, improved margins, and broad-based growth across all businesses; Q3’23 operating income up 27% to AED 7.0 billion. 
• Return on tangible equity (RoTE) improves to 18.3%, up from 12.7% in 9M’22.
• Customer deposits up 12% to AED 785 billion, with a very strong liquidity profile 
• Total assets at AED 1.2 trillion, up 7% YoY.