FGB reports record Q1 earnings

The results - a 8% increase on the first three months of 2006 - reflect growth across all the bank's core businesses, including corporate, treasury and investment, retail and ancillary businesses. Total operating income in the first quarter of this year reached AED 564 million (US $ 153 million), exceeding the first three months of 2006 by 9%.

"This is a very encouraging performance when considering that first quarter results for 2006 were aided by revenue from two major IPOs and the absence of similar revenue in the first three months of this year. While the core net profit represented only 35% of total 2006 first quarter net profit, it represented 65% of total net profit for first quarter 2007" explained André Sayegh, FGB's Chief Executive Officer.

"We have continued to reap the dividends of our highly focused strategy of income diversification which will further advance by seizing opportunities emerging from the vibrant UAE economy which allows us to grow our loan book and fee income,".

"FGB is achieving healthy liquidity, profitability and efficiency ratios with its loans-to-deposit ratio at 80%, return on average assets at 3.3%, return on average equity at 17.3% and cost-to-income ratio at 26%."

The bank also maintained excellent international-standard ratios on non-performing loans and their provision coverage. Its non performing loans to gross loans ratio is 1.3% and provision coverage around 133%.

"FGB's balance sheet also demonstrates consistent growth. After excluding the March 2006 IPO outstandings, total assets rose 55% on the same period last year, advances increased by 45%, deposits by 119% and shareholder equity by 8%," added André Sayegh.

At the end of March this year, FGB's earnings-per-share was AED 0.32 (US $ 0.09) compared to AED 0.30 (US $ 0.08) at the end of March 2006.

"In line with the Board's pledge to shareholders at the last annual general meeting, the bank is now working towards achieving an average return on equity in excess of 18%," said André.

"We intend to deliver this by continuing to diversify revenue streams, widening our core businesses through deeper market penetration with the expansion of our branch network and presence throughout the Emirates, the launch of innovative products and services and international expansion via representative offices and acquisitions,".

During the first quarter, FGB has launched the region's first stand-alone, unsecured Islamic Credit Card - the Makkah Credit Card - which allows holders to earn 'Steps' to travel to the Holy City of Makkah.

"And, in line with our corporate philosophy that our people are our strongest asset, we will continue investment in staff and infrastructure and will strengthen our risk management tools and processes through investment in Basel II automated systems."

FGB recently contracted Dun & Bradstreet, the worldwide specialist provider of business information, to enhance and develop the bank's risk management and compliance protocols. The tie-up provides consultancy and technology solutions for the development of processes and systems that meet the exacting Basel Capital Accord standards - known as Basel II - which has created an urgent need amongst banking organisations for sophisticated risk management tools.