Capital firms bank on a golden future

Big players: First Gulf Bank and NBAD’s profits keep on soaring.

Similar to other divisions of the economy, the UAE's banking sector is witnessing unprecedented growth and Abu Dhabi has a fair share of the overall market with five star banks.

First Gulf Bank (FGB), one of the UAE's leading financial institutions, has recently announced record profits for the first quarter of 2006 with a net profit of US$111m. The figures show an 8% increase compared to the first three months of 2006 and reflect growth in the bank's different sectors namely corporate, treasury and investment, retail and ancillary businesses.

The bank's total operating income in the first quarter of this year hit US$153m, exceeding the same period in 2006 by 9%. The bank continues growing on a steady rate. 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%.

Recently, FGB launched its Makkah Credit Card, the region's first unsecured Islamic credit card. The bank reported great demand for the new product saying it exceeded expectations as the Sharia-compliant market for Islamic products continues to grow rapidly. The card was created to offer convenient Sharia-compliant payment methods, and presents cardholders with the opportunity to earn what the bank calls ‘Steps' towards a trip to the Holy City of Makkah, every dirham spent on the card earns customers one step.

Another big player from the capital is the National Bank of Abu Dhabi (NBAD), which claims to be the leading bank in the Emirates in terms of total assets, deposits, branches and ATM network. NBAD operates branches in Egypt, Oman, Sudan, the UK, France, the US and Bahrain. Recently, NBAD along with Dubai eGovernment launched a prepaid card to facilitate the use of the government's online services.

Union National Bank (UNB) is another financial entity in Abu Dhabi with considerable presence. It was founded in 1982 as a public joint stock exchange. The UNB is the only bank jointly owned by the governments of Dubai and Abu Dhabi. Subsidiaries of the bank include Union Brokerage Company (UBC) - one of the first national companies to deal in the brokerage field in the UAE - and the Al Wifaq Finance Company, established to offer Sharia compliant services. Aiming to play a bigger role in the region, UNB is now present in Egypt through its acquisition of the Alexandria Commercial and Maritime Bank. UNB's latest financial figures show a consolidated net profit of US$272m for the year ended December 31, 2006, despite a reduction in the capital market activities income by US$57.7m in 2006 compared to 2005. The bank's income from core activities has shown a steady upturn as is evident by a 28.7% increase in the net interest income from US$187.9m in 2005 to US$241.7m for the year ended December 31, 2006. On the other hand, another key player in Abu Dhabi's financial sector, Abu Dhabi Commercial Bank (ADCB) announced net profit for the first three months of 2007 of US$127.8m compared to US$169.5m for the same period last year.

The bank reported an increase in its 1st quarter core profit by 35% over the corresponding period in 2006. The banks total assets have also increased by 8% from US$22bn to US$23.9bn during the first three months of 2007.

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