National Bank of Fujairah announces strong growth in 9-month period

The third quarter results were impacted by international market conditions which resulted in a net loss of Dhs86.5m as opposed to the corresponding quarter of 2007 which produced a profit of Dhs76m.

Investment fair value decline in the quarter was Dhs133m, of which Dhs109.5m was recognized through the Profit and Loss compared to Investment income of Dhs55.4m for the corresponding quarter of 2007.

An additional impairment loss of Dhs69.7m has been recognized in respect of credit exposures impairment caused by the current market conditions.

"The underlying core business growth continues to be robust whilst the net results for the nine month period to 30th September 2008 were impacted by the global market conditions. Core operating income for three months and nine months periods ended September 2008 grew by 52% and 44% respectively over corresponding periods of 2007. NBF has been prudent in providing for potential impairment losses against credit exposures given current market conditions,"

said Steve Mullins, CEO.

For the nine months period, core operating income, excluding investment fair values, showed a growth of 44.4% compared to the corresponding period of 2007.

Core businesses maintained strong growth on the back of volumes despite pressure on margins. Net interest income rose by 39.36% and fee income grew by 40.72%.

NBF's foreign exchange income doubled to Dhs30.75m compared to the corresponding period of 2007.

"NBF's liquidity and capital adequacy ratios have been strengthened during the quarter on the back of subordinated debt of Dhs400m and a new syndicated loan facility of $210m equivalent which replaced the previous facility of $130m. This new funding supported the Bank in managing liquidity better during difficult market conditions and NBF remained in compliance with Central Bank regulatory ratios" added Mullins.

Total assets of Dhs13.76bn grew by 34.34% over 30 September 2007.

Total shareholders' equity as of 30th September 2008 stood at Dhs1.68bn and the bank's capital adequacy ratio at period end stood at 15.5% against the Central Bank minimum of 10%.

Operating expenses increased by 34.89% largely due to investment in governance and infrastructure and strengthening of human capital.

Cost to income ratio was 51.82% compared to 31.89% in the corresponding quarter of 2007 which reflects lower earning levels; however, adjusted for loss / income from investments, the ratio would be 35.56% and 38.06% for respective periods in line with management expectations.