First Abu Dhabi Bank (FAB) reported its financial results for the three-month period ended 31 March 2022.
The Group produced a strong set of results with a net profit of AED 5.1 Billion, up 107% from AED 2.5 Billion in the first quarter of 2021. These results include a AED 2.8 Billion net gain from the sale of a majority stake in the payments business Magnati. Core underlying performance was healthy, driven by higher net interest income, a pick-up in fees and commissions and the positive contribution from Bank Audi Egypt, helping offset lower trading and investment income. Operating expenses were up year-on-year on the back of ongoing investments in digital and strategic initiatives, and the inclusion of Bank Audi Egypt from Q2’21. The Group continues to demonstrate strong fundamentals across asset quality, liquidity, funding and capital metrics.
I am pleased to report that FAB has achieved a Group net profit of AED 5.1 Billion in the first three months of 2022 representing the highest quarterly net profit in the bank’s history, as we continued to make excellent progress on our growth strategy and transformation initiatives, in line with our long term plan to deliver sustainable value to all our stakeholders.
Our core businesses performed well during a period of sustained buoyant economic activity in the UAE, capitalising on a healthy pipeline, and growing business and consumer confidence.
Our results in the first quarter include a gain from the sale of a majority stake in Magnati, crystallising significant value for our payments business and paving the way for accelerated growth with a long-term strategic partner as we remain at the forefront of the region’s payments and digital agenda.
Internationally, we continued to expand our presence into new, targeted markets. Egypt remains a strategically important market for the Group, and the integration of Bank Audi Egypt is on track for completion within the next few months. Our Shanghai branch became operational in March, and we opened a representative office in Iraq, serving as a strategic addition to our geographic footprint as the UAE continues to be one of Iraq’s most important trading partners.
We have advanced our ESG journey and achieved new milestones further integrating ESG into the organisation in line with our strategic targets and commitment to achieve net zero carbon emissions by 2050. FAB reaffirmed its leadership in the Green Bond market issuing the first Public Green Bond of 2022, and the first ever Green bond from the MENA region in the EURO market.
Looking ahead and despite ongoing global uncertainty, we see significant momentum in the UAE which FAB is very well positioned to support and capitalise on. We are confident in our journey ahead as we continue to position FAB to deliver superior shareholder value and promote meaningful growth in the markets and communities in which we operate.
The Group delivered a net profit of AED 5.1 Billion in the first quarter of 2022, compared to AED 2.5 Billion in the prior year period. These results include a net gain of AED 2.8 Billion related to the sale of a 60% stake in Magnati, in line with our Group strategy to leverage long-term partnerships to unlock value.
Underlying operating performance was healthy as we saw growth picking up across all our business segments particularly at the tail-end of the quarter with Group loans expanding 6% year-to-date, and margins improving. Deposit mix also improved with Current and Savings Accounts (CASA) adding AED 22 Billion sequentially to represent 52% of total customer deposits. In an increasing interest rate environment, this places us in good stead to deliver higher returns in the coming quarters.
Fee-generation remained strong demonstrating healthy pipeline execution across the business, in addition to increased client flow activity in Global Market sales, which helped partially offset softer trading and investment income. Sales momentum was also sustained in Consumer Banking across key products underlining growing consumer confidence.
We continued to make necessary investments in our people, processes and digital infrastructure across our network, to enable future productivity and efficiency gains. We also maintained adequate provision buffers with a coverage ratio at 98%, while prudently managing risk across the Group.
Our balance sheet fundamentals are solid across liquidity, funding and capital ratios, with Common Equity Tier 1 ratio at 13.0% as of March-end 2022. This foundation, along with our core strengths and long-term strategy, position us very well to service our customers across our global network, whilst delivering enhanced and sustainable returns to our shareholders.