The National Bank of Fujairah (NBF) has announced impressive financial results for the year, showcasing a significant 28.9% increase in net profit before tax. The bank reported a total of Dh934.8 million in net profit before tax, up from Dh725.1 million in 2023. Meanwhile, NBF’s net profit after tax reached an all-time high of Dh850.1 million, factoring in a corporate tax expense of Dh84.7 million.
Strong Market Conditions Drive Growth
NBF attributed its robust performance to a combination of favorable market dynamics, initiatives from the UAE government, improvements in impairment provisions, and effective cost management. These factors have played a crucial role amid ongoing global uncertainties and geopolitical challenges. The bank’s statement highlighted that these strategies contributed significantly to their solid results.
Reduced Impairment Provisions and Improved Asset Quality
As of December 31, 2024, NBF reported net impairment provisions totaling Dh690 million, reflecting a remarkable decrease of 19.7% from Dh859 million in the previous year. The quality of NBF’s assets improved as well, with the combined IFRS 9 stage 2 and 3 metrics showing a decline to 10.2% from 12.2% reported at the end of 2023. Although the non-performing loan (NPL) ratio slightly increased to 5.1%, up from 4.9% in 2023, the overall provision coverage ratio remained strong at 119.4%.
Record Operating Profit and Income
Fuelled by robust revenue generation spurred by balance sheet growth, NBF achieved its highest operating profit ever, amounting to Dh1.62 billion, which is a 2.6% increase from Dh1.58 billion in 2023. In terms of operating income, the bank recorded a peak of Dh2.4 billion, marking a 6.7% rise over the previous year. This growth reflects NBF’s focus on expanding key business segments, managing assets and liabilities proactively, and maintaining a customer-centric approach, which countered the effects of declining interest rates.
Growth Across Key Financial Metrics
- Net Interest Income: Rose by 4.8% to Dh1.8 billion, compared to Dh1.7 billion in 2023.
- Net Fees and Commission: Increased by 8.4% to Dh452.7 million from Dh417.8 million in the previous year.
- Foreign Exchange and Derivatives Income: Posted a solid growth of 15%, reaching Dh189.1 million.
An uplift of Dh20 million in investments designated as fair value through other comprehensive income (FVOCI) also contributed to NBF’s total comprehensive income, which amounted to Dh870.1 million—an increase of 10.1% from Dh790.4 million in 2023.
Proposed Cash Dividends
In light of its successful financial performance in 2024, NBF’s board of directors has proposed a cash dividend of 15%, reflecting confidence in the bank’s ongoing growth and stability.
Looking Ahead
As NBF continues to navigate a complex global landscape, its recent results indicate a strong trajectory for future growth. The bank’s strategic initiatives, combined with a focus on customer satisfaction and proactive risk management, position it well for the challenges ahead. How will NBF sustain its momentum in a fluctuating economic environment? This question remains pivotal for stakeholders as they contemplate the path forward.
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