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• 2021
• National Bank of Fujairah PJSC (NBF) – NBF posted an encouraging set of half year results bouncing back with a net profit growth of 17.1%

National Bank of Fujairah PJSC (NBF) – NBF posted an encouraging set of half year results bouncing back with a net profit growth of 17.1%

NBF is pleased to announce its results for the six month period ended 30 June 2021.

Highlights:

• NBF posted a net profit of AED 76.2 million for the six month period ended 30 June 2021, an increase of 17.1% over the corresponding period of 2020, which exhibits its resilient business strategy. The net profit was up 430.8% for the three month period ended 30 June 2021 compared to the corresponding period of 2020.
• NBF achieved an operating profit growth of 11.3% for the three month period ended 30 June 2021 over the corresponding period of 2020; and 2.3% compared to Q1 2021, demonstrating the on-going recovery phase. Operating profit stood at AED 502.0 million for the six month period ended 30 June 2021 compared to AED 521.4 million in the corresponding period of 2020.
• Operating income growth of 7.8% was recorded for the three month period ended 30 June 2021 over the corresponding period of 2020; and 1.1% compared to Q1 2021. Operating income stood at AED 724.5 million for the six month period ended 30 June 2021 compared to AED 755.6 million in the corresponding period of 2020, reflecting gradual recovery from the challenging operating environment presented by the COVID-19 pandemic from Q2 2020.
• Net interest income and net income from Islamic financing and investment activities grew 2.5% in the three month period ended 30 June 2021 over the corresponding period of 2020; and 6.1% compared to Q1 2021. Net interest income and net income from Islamic financing and investment activities stood at AED 469.1 million for the six month period ended 30 June 2021 compared to AED 511.9 million in the corresponding period of 2020.
• Net fees, commission and other income rose 6.1% to AED 166.2 million for the six month period ended 30 June 2021 compared to AED 156.7 million in the corresponding period of 2020. It was up 30.4% for the three month period ended 30 June 2021 compared to the corresponding period of 2020; and up 12.1% compared to Q1 2021.
• Foreign exchange and derivatives income reached AED 54.6 million for the six month period ended 30 June 2021 compared to AED 68.9 million in the corresponding period of 2020.
• Income from investments and Islamic instruments marked a substantial improvement to AED 34.6 million during the six month period ended 30 June 2021 compared to the corresponding period of 2020. Unrealised gain on fair value through other comprehensive income (FVOCI) investments stood at AED 68.9 million.
• Operating expenses reduced by 5.0% to AED 222.6 million compared to AED 234.2 million in the corresponding period of 2020, demonstrating the measures adopted in line with the changing market conditions and our focus on exceptional customer service through digital adoption and innovation. Cost-to-income ratio marginally reduced to 30.7% compared to 31.0% in the corresponding period of 2020 reflecting the lower operating income.
• NBF maintained its policy of prudent and transparent recognition of problem accounts. NBF secured net impairment provisions of AED 425.7 million for the six month period ended 30 June 2021, down 6.7% compared to AED 456.3 million in the corresponding period of 2020. During the period, the bank’s impairment reserve reduced to AED 270.2 million compared to AED 283.5 million as at 31 December 2020. Total provision coverage ratio (including impairment reserves) stood at 93.8% compared to 91.8% as at 31 December 2020. The NPL ratio stood at 10.0% compared to 10.1% as at 31 December 2020. Excluding a few exceptional group exposures, the NPL ratio would reduce to 6.8% (31 December 2020: 7.3%).
• The capital adequacy ratio (CAR) is being kept at a recent high for the bank to support the bank’s ability to ride out any challenges arising out of the evolving operating landscape. CAR stood at 19.6% (Tier 1 ratio of 18.4% and CET 1 ratio of 14.3%) compared to 19.2% (Tier 1 ratio of 18.1% and CET 1 ratio of 14.0%) at 2020 year-end.
• Loans and advances and Islamic financing receivables rose by 1.7% to reach AED 25.3 billion compared to AED 24.8 billion at 2020 year-end and AED 26.4 billion as at 30 June 2020.
• Investments and Islamic instruments stood at AED 4.9 billion compared to AED 5.2 billion at 2020 year-end and AED 4.0 billion as at 30 June 2020 evidencing the deployment of a portion of excess liquidity towards the high quality investment book to protect shareholder value.
• Customer deposits and Islamic customer deposits stood at the 2020 year-end level of AED 29.8 billion compared to AED 32.9 billion as at 30 June 2020. CASA deposits improved to 40.6% of total customer deposits compared to 38.0% as at 31 December 2020 and 31.2% as at 30 June 2020. Current and Saving Accounts (CASA) deposits increased by AED 805.2 million to reach AED 12.1 billion compared to AED 11.3 billion as at 31 December 2020 cushioning the impact from the lower interest rates.
• Total assets rose by 3.0% to reach AED 41.1 billion compared to AED 39.9 billion at 2020 year-end and AED 44.5 billion as at 30 June 2020.
• Shareholders’ equity stood at the 2020 year-end level of AED 5.7 billion compared to AED 6.2 billion as at 30 June 2020.
• Ample liquidity was maintained with lending to stable resources ratios at 79.3% (2020: 82.1%) and eligible liquid assets ratio (ELAR) at 22.5% (2020: 20.8%), well ahead of all CBUAE minimum requirements.
• Return on average assets was 0.4%, up from 0.3% for the corresponding period in 2020.
• Return on average equity was 2.7%, up from 2.1% for the corresponding period in 2020.

Dr Raja Al Gurg, Deputy Chairperson said:

“Our H1 2021 results exhibit the Group’s resilience; marking the return to profitable growth in line with the bank’s strategy to recognize the substantial negative impact from a few exceptional exposures and COVID-19 pandemic in 2020 relatively early to achieve a recovery in asset quality this year. The current economic outlook depicts signs of a return to growth on the back of UAE government measures against the aftermath of COVID-19.

It is reassuring that NBF is able to maintain its growth momentum and we aim to carry the same into the second half of the year and beyond adding value to all our stakeholders and the UAE economy as a whole; whilst maintaining solid capital adequacy, liquidity, a healthy deposit mix and a staunch focus on core business, exceptional customer service through segmented focus and prudent risk management standards. With the banking industry continuing to face asset quality concerns, rising cost of risk and margin pressures, NBF will cautiously adapt and pursue quality opportunities combined with proactive asset and liability management to achieve sustainable future growth.

We are delighted to see the growing market recognition during H1 2021; where NBF bagged the most innovative emerging technology implementation award at the MEA Finance’s Banking Technology Awards 2021. NBF will continue to invest and implement its digital strategy to make it a competitive advantage for its future growth, uphold the highest standards of compliance and internal controls commensurate with the new regulatory changes and information and cyber security requirements.

The Group will continue to support its customers and clients through relief measures or otherwise and with its progressive environment, governance and social (ESG) initiatives displaying solidarity with our communities, while protecting and enhancing the interest of our shareholders.”

About National Bank of Fujairah PJSC:

Incorporated in 1982, National Bank of Fujairah PJSC (NBF) is a full services corporate bank with strong corporate and commercial banking, treasury and trade finance expertise as well as an expanding suite of personal banking options and Shari’a compliant services. Leveraging its deep banking experience and market insight within Fujairah and the UAE, NBF is well-positioned to build lasting relationships with its clients and help them achieve their business goals.

NBF’s key shareholders include the Government of Fujairah, Easa Saleh Al Gurg LLC and Investment Corporation of Dubai. Rated Baa1 / Prime-2 for deposits and A3 for counterparty risk assessment by Moody’s with a negative outlook; and BBB / A-2 by Standard & Poor’s with a stable outlook, the bank is listed on the Abu Dhabi Securities Exchange under the symbol “NBF”. It has a branch network of 15 (of which 1 is an electronic banking service unit) across the UAE.

For further information, please contact:

Strategic Marketing and Communications Department

E-mail: CorpComm@nbf.ae

Telephone: +971 4 507 8351 and +971 4 507 8576