UAE Top Bank FAB Surpasses Q4 Revenue Estimates with Strong Performance

Post by: Raman Preet

Photo : Reuters

First Abu Dhabi Bank (FAB), the largest bank in the UAE by assets, exceeded profit expectations for the fourth quarter of 2024. The bank reported a net profit of 4.2 billion dirhams ($1.14 billion), which is a 4% increase from the same period last year, where it was 4.01 billion dirhams. This result surpassed analysts' expectations, who had forecasted a profit of 4 billion dirhams, according to LSEG data.

However, FAB’s shares fell by 0.7% at around 7:35 AM GMT, underperforming the broader market which saw a 0.3% drop in the Abu Dhabi index.

EFG Hermes analyst Shabbir Malik mentioned that FAB's earnings were in line with their forecast. The bank managed to keep up with taxes despite higher-than-expected provisioning, which was likely caused by the introduction of new regulations around provisions.

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FAB’s net impairment charges, which are related to provisions set aside for potential loan losses, increased by 27% in 2024. The bank explained that these higher charges were due to strong provisioning in line with changes in the regulatory environment. This trend of increasing impairment charges was also observed in other local banks. For instance, Abu Dhabi Islamic Bank (ADIB) saw a 4% rise in net impairment charges for 2024, while Abu Dhabi Commercial Bank (ADCB) reported a significant rise in its charges during the fourth quarter due to new credit risk management standards set by the UAE Central Bank.

For the full year 2024, FAB’s net profit grew by 4% to reach 17.1 billion dirhams. The bank also proposed a cash dividend of 0.75 dirhams per share, slightly higher than the 0.71 dirhams per share dividend announced for 2023.

FAB, like other banks in the UAE, has benefited from the region's economic growth, driven by government investments to diversify away from oil dependency. FAB’s loans, advances, and Islamic financing grew by 9% to 529 billion dirhams in 2024, outpacing the 3% growth in deposits, which reached 782 billion dirhams. The bank’s total assets rose by 4% to 1.21 trillion dirhams.

The bank also faced challenges as several senior bankers left the company. Reports from January revealed that the head of global markets and the chief operating officer of FAB were among the senior executives departing.

Despite this, FAB remains one of the strongest banks in the UAE, with a solid financial performance in 2024.

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