Finance House PJSC (FH) has registered a consolidated net profit of Dhs25.53m for the first quarter of 2015 compared to Dhs35.51m earned during the first quarter of the previous year.
Net Interest Income & income from Islamic Financing and Investing Assets soared by 47.60 per cent compared to the same period last year on the back of a robust growth in the loan book and fixed income securities portfolio.
However, Net Fee & Commission Income was lower than the same period last year due to significantly lower commission income from the brokerage business resulting from subdued trading volumes in the domestic equity markets during the first quarter of 2015. Net Investment Income from a diversified investment portfolio stood at Dhs27.29m compared to Dhs49.14m in the comparable quarter of the previous year.
This was primarily due to the disappointing performance of the domestic equity markets (ADX & DFM) in Q1 2015 compared to the dream bull-run experienced in Q1 2014. As a combined result of the above, Total Operating Income for Q1 2015 stood at Dhs79.35m compared to Dhs91.20m for the same period last year.
Net Loans & Advances including Islamic Financing & Investing Assets registered a robust YOY growth of 20.87 per cent to reach Dhs1.99bn as of 31 March 2015, compared to Dhs1.65bn at the same time last year. Customers’ Deposits grew by a whopping 34.75 per cent YOY to reach Dhs2.76bn as of 31 March 2015 compared to Dhs2.05bn as of 31 March 2014. The resultant Loans to Deposits ratio as of 31 March 2015 stood at a healthy 72.22 per cent compared to 80.52 per cent as of 31 March 2014, leaving ample room for continued growth in the loan book in the near future.
Commenting on Q1 2015 results, Mohammed Abdulla Alqubaisi, Chairman of Finance House, said: “The results achieved in Q1 2015 are a continuing reflection of a resilient business model that has stood the test of time. Our three main business areas, viz. Commercial Finance, Retail Finance & Investments complement each other and are seamlessly integrated to deliver profitable business growth despite changing economic conditions.”
In line with its conscious approach to maintain abundant liquidity at all times, FH’s Liquidity position as of 31 March 2015 remained robust with Cash & Cash Equivalents accounting for 17.69 per cent of Total Assets. Furthermore, FH’s comfortable Capital Adequacy Ratio of 19.6 per cent as of 31 March 2015 provides ample room for asset growth in the near future.
“Notwithstanding this comfortable Capital Adequacy position, we are in the final stages of bolstering our Capital even further through the issuance of Dhs300m of Tier 1 Perpetual Sukuk, which has recently been approved by the shareholders and the concerned regulators. The augmented capital base is intended to support our aggressive growth plans over the next 3 to 5 years,” according to Alqubaisi.
Earlier this year, FH’s investment grade corporate credit rating of ‘BBB-“(Long Term) and“A3’ (Short Term), both with a “Stable” outlook were reaffirmed by Capital Intelligence (CI), an internationally reputed credit rating agency.
“We remain confident that our strategy of continuously seeking and addressing profitable niche segments will enable us to continue generating healthy returns to our shareholders on a sustained basis,” concluded Alqubaisi.