Local bank pumped $5.45bn into UAE economy

Shareholders approved payment of 100 percent cash dividend

First Gulf Bank (FGB)

First Gulf Bank (FGB)

Abu Dhabi-based First Gulf Bank has paid more than $5.45 billion (AED20bn) in dividends over the past six years, its CEO has said.

Shareholders approved the payment of 100 percent cash dividend at its annual general meeting in Abu Dhabi on Tuesday, after the bank reported a net profit of $1.64bn (AED6.03bn) for 2016, its highest profit in 17 years.

The bank is set to merge with the National Bank of Abu Dhabi (NBAD) by end of the first quarter 2017, creating a “mega bank” with assets of around $175bn (AED642bn).

“Good days are challenging and difficult days are challenging, but we have delivered at all times,” Andre Sayegh said.

“We are paying almost 75 percent of our net profit in dividend [for 2016] and have pumped in over $5.45bn in the economy and to our shareholders between 2010 and 2016.”

According to the official, despite paying $1.23bn (AED4.5bn) in dividends, the bank still maintains a high capital adequacy ratio of 18.3 percent.

“We have very good [business] model and good fundamentals, which will add value to the new bank in the coming years,” Sayegh said.

The merged entity will continue to work on improving cost synergies though the preliminary numbers indicated cost-saving of $136.24m (AED500m) a year to be realised over a three-year period and an estimated one-time integration cost of $163.48m (AED600m), he said.

“After the merger, we will try to make it better than what was announced,” Sayegh said.

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