FAB’s Q3 2023 profit surges by 48% on revenue boost

UAE’s First Abu Dhabi Bank, also known as FAB, said its Q3 2023 net profit jumped by 46 per cent year-on-year (YoY), boosted by robust revenues amid continuing growth in the banking group’s core business.

FAB’s third-quarter net profit was Dhs4.3bn ($1.17bn), the highest quarterly profit on an underlying basis, while its profit in the nine months to September 30 reached Dhs12.4bn, a 58 per cent YoY increase compared to the same period a year ago.

The banking group’s operating income reached Dhs7bn in Q3 2023, a 27 per cent YoY increase compared to Dhs5.5bn in the third quarter of 2022, by sustained momentum across all business lines, continued strength in fee-based businesses, and higher market-related income.

FAB’s net interest income surged by 26 per cent in Q3 2023 to Dhs4.58bn, compared with the same period a year earlier while the bank’s revenues in the first nine months of the year jumped by 38 per cent to cross the Dhs20bn mark.

“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,” said Hana Al Rostamani, the group CEO of FAB.

The bank maintained robust balance sheet fundamentals during the period under review. Its total assets edged up 7 per cent year-to-date (YTD) to reach Dhs1.2tn, customer loans rose by 4 per cent to reach Dhs478bn while customer deposits surged by 12 per cent to Dhs785bn.

“Despite high-interest rates, group asset quality remained strong with adequate provision coverage. Our prudent approach to risk is at the cornerstone of FAB’s profile, enabling us to preserve a high-quality book and showcase resilience through the cycles,” said Lars Kramer, FAB’s group chief financial officer.

The group’s total non-interest income for the reporting period soared by 29 per cent year on year to Dhs2.4bn.

FAB drive sustainable financing

Meanwhile, the banking group continues to lead the regional sustainable finance landscape as the UAE is set to host the 28th UN Climate Change Conference of Parties (COP28) from November 30 to December 12.

FAB facilitated more than $18bn worth of sustainable projects in the nine months to September 30, to achieve a 36 per cent $75bn 2030 target to date producing significant positive environmental impacts through the projects we fund.

It issued more than $3.2bn in green and Islamic bonds across 15 issuances and six different currencies.

Kramer said the bank FAB moved decisively forward with its aim to facilitate $75bn of sustainable finance projects by 2030, having funded sustainable projects worth more than $27bn 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,” he said.

With a global footprint spanning 20 markets across five continents, FAB’s international franchise remains a key contributor to the banking group’s liquidity, profitability and revenue diversification, generating 20 per cent of first-half group revenues.