FAB chief hails 'resilient' performance amid pandemic

Bank's total assets grew to Dh1tn by the end of September

First Abu Dhabi Bank's new digital payments business will go live early next year, the lender said. Chris Whiteoak / The National

The chief executive of First Abu Dhabi Bank, the UAE's largest lender, said it delivered a "resilient" performance for the first nine months of the year in the face of "unprecendented economic and market conditions".

Third quarter net profit slid 19 per cent to Dh2.5 billion ($680 million), as operating income fell 15 per cent to Dh4.3bn year-on-year, the bank said in a statement to the Abu Dhabi Securities Exchange, where its shares trade. Impairment charges rose 7 per cent to Dh504m.

"With total assets almost reaching the Dh1 trillion mark as of September-end 2020, our robust foundation enabled us to continue to support our clients, and to benefit from the gradual rebound in economic activity and market sentiment," the bank's chief executive, André Sayegh, said.

Lenders around the world are facing challenging market conditions as a result of the Covid-19 pandemic, which has crimped growth and tipped the global economy into its deepest recession since the 1930s.

Monetary stimulus undertaken by governments have pushed interest rates to zero or near-zero in many countries, making it harder for banks to generate profit.

Most banks have also had to record higher provisions to account for likely increases in loan losses.

The top lenders in the US and Europe Banks have provisioned $139bn as bad debt losses could exceed $880bn by 2022, according to  ComprarAcciones.com data.

Earlier this month, ratings agency Moody's said adverse conditions could lead to more mergers among lenders in the Gulf, as the revenue shock from the pandemic and lower oil prices "will shift management attention to cost discipline and consolidation opportunities".

FAB said it is continuing to extend support to clients to mitigate the effects of the pandemic and had deferred Dh7.5bn worth of debt owed by retail, SME and corporate customers under the Central Bank of the UAE's Targeted Economic Support Scheme as of the end of September.

"In addition to TESS, FAB continued to provide relief to customers through its own programmes," the lender said.

FAB's net profit for the first nine months slid 22 per cent to Dh7.3bn, from the year-earlier period. Total operating income was 10 per cent lower at Dh13.7bn.