VP endorses new AED 3 billion crossing on Dubai Creek
The Board of Directors of First Gulf Bank (FGB), one of the UAE's leading financial institutions, has announced its full year 2007 results today with record profit of AED 2,008 million - an increase of 31 % on its 2006 performance.
For the year, total operating income increased by 37% to AED2.8 billion, with net interest of AED1.3 billion representing an increase of 10%.
This effectively translates to 37% once we exclude the extra interest generated during the IPO cycles of 2006-2007. Other operating income totaled AED1.5 billion, reflecting an increase of 74%. Earning per share increased by 31% from AED1.23 to AED1.61.
The net profit of AED621 million for the fourth quarter of 2007 was 23% higher than the third quarter of 2007 and 57% higher than the same quarter of 2006. The bank kept on delivering a continuous and consistent growth quarter on quarter and year on year.
The bank's consistent growth is coupled with healthy profitability, efficiency, liquidity and capital adequacy ratios with return on average equity at 21%, return on average assets at 3.3%, cost to income ratio at 21.6%, loan to deposits ratio at 85% and a capital adequacy ratio of 15%, demonstrating ongoing strong financial performance.
"Once again we have exceeded stakeholders' expectations and demonstrated strong growth and performance. This record performance is a reflection of the Board vision and the management's ongoing strategy, which is built on dynamisn and is reinforcing FGB's position as one of the UAE's leading financial institutions operating to world-class standards," commented Andre Sayegh, CEO, First Gulf Bank.
With assets in excess of AED73 billion (US$ 20 billion), FGB ranks among the UAE's largest financial institutions. During 2007, FGB grew its assets by 53%, customers' deposits by 52%, and its loan book by 77%. It is worth highlighting that the Non-Performing Loans to Gross Loans were at a ratio of only 1.0%, which is comparable to the best performing, highly rated international banks.
In line with FGB strategy to become a fully fledged diversified financial group, 70% of the net profit was generated from its major businesses; Retail, Corporate banking and Treasury & Investment divisions. While the remaining 30% of the record profit was generated mainly by FGB's fully-owned subsidiaries - "Mismak" and "First Merchant International", in connection with real estate and merchant banking activities.
This was complemented by three associate companies; "First Gulf Financial Services" (FGFS) for equity brokerage; 45% owned by FGB, "Green Emirates Properties" for property management and real estate brokerage, and "Aseel Islamic Finance" - both 40% owned by FGB.
The Retail business which contributed 26% to the total revenue of the bank had a series of new product launches in 2007 which helped FGB expand its customer base. These included "Siraj", a full range of Shari'ah compliant products and services; "First Wealth", a management service targeted at high net worth individuals; Platinum credit card again aimed at the high net worth segment.
The Corporate business after spinning-off few of its units contributed 24% to the total revenue of the bank in 2007. The bank's strategy of adding new dimensions through structured products and its growing involvement in syndications proved a growth driver for this line of business.
The Treasury and Investment business contributed 30% to the total revenue through efficient management of the liquidity as well as generating considerable fee and investment income.
"Product and segment expansion will be further enhanced during the coming 12 months as FGB continues with its strategy of evolving into a fully-fledged financial services provider," said Sayegh.
The past 12 months have also seen FGB embark on overseas expansion in line with its international diversification strategy. During 2007, FGB opened its first international representative office in Singapore to service expanding Far Eastern markets, it also signed an MoU with Libya's Economic & Social Development Fund to establish jointly a fully fledged commercial bank in the country. The bank has also entered into discussions with the Algerian government to obtain a license to operate in the country.
Another 2007 highlight saw FGB upgraded to an A+ rating by Fitch, A+ by Capital Intelligence and A2 by Moody's, reflecting sound business principles, market capitalization, franchise growth, profitability and liquidity and further solidifying the bank's reputation internationally.
This has resulted in the bank successfully raising a $825 million five year club loan via a group of mandated lead arrangers including 11 international banks.
"During 2008 we will continue to build upon the strong principles that allowed FGB to become recognized as a world-class leader in the banking industry. We will expand our franchise beyond the borders of the UAE in a rational way to complement our business. By delivering on our vision and commitment of maximizing returns to shareholders, providing exceptional customer service along with introducing innovative retail, corporate and investment banking solutions to the market, First Gulf Bank businesses are well positioned to continue its path of strong growth " added Sayegh.
"A key strength of FGB is our people, which we consider to be our primary asset. We have an exceptionally strong team of professionals implementing our vision and formulating our strategy and as a company we will continue to invest in their training and development. Additionally we continue to seek out and hire the best local talents through our Emiratisation programs." During its meeting, the First Gulf Bank board, taking into consideration 2007 performance and the future growth potential, recommended the distribution of 20% cash dividend and 10% bonus shares of 2007 share capital subject to approvals from Central Bank, Emirates Securities and Commodities Authority and shareholders' annual general meeting.
Commenting on the outstanding results, Abdulhamid Saeed, Managing Director, First Gulf Bank, said, "FBG's financial results for 2007 are a reflection of a sound strategy, as approved by the board of directors, has been successfully implemented by the bank's management. With positive economic prospects for the UAE throughout 2008, we are well placed to play a key role in partnering the expansion which is taking place across a variety of commercial, industrial and economic segments." (WAM)
For the year, total operating income increased by 37% to AED2.8 billion, with net interest of AED1.3 billion representing an increase of 10%.
This effectively translates to 37% once we exclude the extra interest generated during the IPO cycles of 2006-2007. Other operating income totaled AED1.5 billion, reflecting an increase of 74%. Earning per share increased by 31% from AED1.23 to AED1.61.
The net profit of AED621 million for the fourth quarter of 2007 was 23% higher than the third quarter of 2007 and 57% higher than the same quarter of 2006. The bank kept on delivering a continuous and consistent growth quarter on quarter and year on year.
The bank's consistent growth is coupled with healthy profitability, efficiency, liquidity and capital adequacy ratios with return on average equity at 21%, return on average assets at 3.3%, cost to income ratio at 21.6%, loan to deposits ratio at 85% and a capital adequacy ratio of 15%, demonstrating ongoing strong financial performance.
"Once again we have exceeded stakeholders' expectations and demonstrated strong growth and performance. This record performance is a reflection of the Board vision and the management's ongoing strategy, which is built on dynamisn and is reinforcing FGB's position as one of the UAE's leading financial institutions operating to world-class standards," commented Andre Sayegh, CEO, First Gulf Bank.
With assets in excess of AED73 billion (US$ 20 billion), FGB ranks among the UAE's largest financial institutions. During 2007, FGB grew its assets by 53%, customers' deposits by 52%, and its loan book by 77%. It is worth highlighting that the Non-Performing Loans to Gross Loans were at a ratio of only 1.0%, which is comparable to the best performing, highly rated international banks.
In line with FGB strategy to become a fully fledged diversified financial group, 70% of the net profit was generated from its major businesses; Retail, Corporate banking and Treasury & Investment divisions. While the remaining 30% of the record profit was generated mainly by FGB's fully-owned subsidiaries - "Mismak" and "First Merchant International", in connection with real estate and merchant banking activities.
This was complemented by three associate companies; "First Gulf Financial Services" (FGFS) for equity brokerage; 45% owned by FGB, "Green Emirates Properties" for property management and real estate brokerage, and "Aseel Islamic Finance" - both 40% owned by FGB.
The Retail business which contributed 26% to the total revenue of the bank had a series of new product launches in 2007 which helped FGB expand its customer base. These included "Siraj", a full range of Shari'ah compliant products and services; "First Wealth", a management service targeted at high net worth individuals; Platinum credit card again aimed at the high net worth segment.
The Corporate business after spinning-off few of its units contributed 24% to the total revenue of the bank in 2007. The bank's strategy of adding new dimensions through structured products and its growing involvement in syndications proved a growth driver for this line of business.
The Treasury and Investment business contributed 30% to the total revenue through efficient management of the liquidity as well as generating considerable fee and investment income.
"Product and segment expansion will be further enhanced during the coming 12 months as FGB continues with its strategy of evolving into a fully-fledged financial services provider," said Sayegh.
The past 12 months have also seen FGB embark on overseas expansion in line with its international diversification strategy. During 2007, FGB opened its first international representative office in Singapore to service expanding Far Eastern markets, it also signed an MoU with Libya's Economic & Social Development Fund to establish jointly a fully fledged commercial bank in the country. The bank has also entered into discussions with the Algerian government to obtain a license to operate in the country.
Another 2007 highlight saw FGB upgraded to an A+ rating by Fitch, A+ by Capital Intelligence and A2 by Moody's, reflecting sound business principles, market capitalization, franchise growth, profitability and liquidity and further solidifying the bank's reputation internationally.
This has resulted in the bank successfully raising a $825 million five year club loan via a group of mandated lead arrangers including 11 international banks.
"During 2008 we will continue to build upon the strong principles that allowed FGB to become recognized as a world-class leader in the banking industry. We will expand our franchise beyond the borders of the UAE in a rational way to complement our business. By delivering on our vision and commitment of maximizing returns to shareholders, providing exceptional customer service along with introducing innovative retail, corporate and investment banking solutions to the market, First Gulf Bank businesses are well positioned to continue its path of strong growth " added Sayegh.
"A key strength of FGB is our people, which we consider to be our primary asset. We have an exceptionally strong team of professionals implementing our vision and formulating our strategy and as a company we will continue to invest in their training and development. Additionally we continue to seek out and hire the best local talents through our Emiratisation programs." During its meeting, the First Gulf Bank board, taking into consideration 2007 performance and the future growth potential, recommended the distribution of 20% cash dividend and 10% bonus shares of 2007 share capital subject to approvals from Central Bank, Emirates Securities and Commodities Authority and shareholders' annual general meeting.
Commenting on the outstanding results, Abdulhamid Saeed, Managing Director, First Gulf Bank, said, "FBG's financial results for 2007 are a reflection of a sound strategy, as approved by the board of directors, has been successfully implemented by the bank's management. With positive economic prospects for the UAE throughout 2008, we are well placed to play a key role in partnering the expansion which is taking place across a variety of commercial, industrial and economic segments." (WAM)
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