FGB reports 11% fall in fourth-quarter net profit

The Abu Dhabi lender made a net profit of Dh1.52 billion in the three months to December 31 compared with a profit of Dh1.71bn a year earlier.

FGB’s fourth-quarter operating income fell 12 per cent. Mona Al Marzooqi / The National

Abu Dhabi’s First Gulf Bank (FGB), which is merging with the National Bank of Abu Dhabi (NBAD), reported an 11 per cent fall in fourth-quarter net profit on Tuesday as expenses rose and operating income dipped, but beat analysts’ expectations.

FGB made a net profit of Dh1.52 billion in the three months to December 31, it said. This compares with a profit of Dh1.71bn a year earlier.

Three analysts surveyed by Reuters forecast its fourth-quarter net profit would average Dh1.37bn.

Fourth-quarter operating income was Dh2.4bn, down 12 per cent from Dh2.73bn a year earlier.

FBG and NBAD’s shareholders approved on December 7 the merger between the two Abu Dhabi lenders, which will create the Middle East’s biggest bank by assets, surpassing the current leader Qatar National Bank.

The merger, which will cut down on costs by removing duplicate posts and sharing resources, has also been approved by the Central Bank of the UAE but requires further approval from international regulators and the UAE’s market regulator, the Securities and Commodities Authority.

Egyptian Investment Bank EFG-Hermes has forecast that profit at 9 UAE banks it covers would fall by 8 per cent year-on-year in the fourth quarter because of a rise in provisions and tighter spreads.

It forecast FGB’s fourth quarter net profit would dip 23 per cent to Dh1.32bn.

Abdul Aziz Al Ghurair, the head of the UAE Banks Federation, said in November that banking sector profits may fall between 10 and 20 per cent in 2016 versus 2015 as a slowing economy takes its toll on loan growth.

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