National Bank of Fujairah said last year’s profit was its highest ever as the UAE economy continued to boom, spurring demand for financial services.
Net income increased 28.6 per cent to Dh505.4 million from Dh393.1m last year, the lender said. Loans and advances grew 17.8 per cent to Dh16.3 billion from Dh13.9bn in 2013 and the bank’s losses from bad loans declined to Dh132.4m last year from Dh167.6m in 2013.
“2014 was indeed a year of remarkable progress for the bank, and there was much to be happy about our performance,” said Easa Saleh Al Gurg, the bank’s deputy chairman.
The bank has recommended a dividend of 15 per cent of the paid-up capital for shareholders, an increase of 20 per cent from last year, in the form of cash dividends of 7.5 per cent and bonus shares of 7.5 per cent of paid-up capital.
National Bank of Fujairah, which has carved out a niche in trade finance, joins other banks, including Emirates NBD and Mashreq, to report record profit for 2014.
In the past couple of years, UAE bank growth has been propelled by an economy recovering from the financial crash of 2008.
After years of stagnation, lenders started to stage a comeback in 2012 as government spending on infrastructure trickled down to the wider economy, spurring demand for loans to finance everything from home purchases to corporate expansion.
Last year, the economy is estimated to have grown more than 4 per cent, even after the price of oil, upon which the government relies heavily on to finance its budget, fell by more than 30 per cent in the fourth quarter. Banks including Standard Chartered and HSBC consequently have lowered their growth forecasts.
The UAE economy is expected to grow 3.8 per cent this year, slowing from 4.5 per cent in 2014, according to Shady Shaher, a Dubai-based senior economist for the Middle East and North Africa at Standard Chartered.
So far bankers are sanguine about prospects for loan growth this year, according to a report from the Central Bank released this week.
Top executives at local lenders expect an increase in loan growth in the first quarter after a slight cooling down in the last three months of the year, the report said.
Despite the slump, the results of the Central Bank’s survey of all the country’s lenders showed robust demand in credit in the second half of 2014, with two-thirds of respondents expecting a pick-up in demand during the first quarter of this year.
Also yesterday, Sharjah-based Union Arab Bank said its profit for last year rose to a record, gaining 10 per cent from 2013 to Dh605m. And Sharjah Islamic Bank said its profit advanced 23 per cent to Dh377.2m from Dh307.1m in 2013.
mkassem@thenational.ae
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