National Bank of Fujairah returns to profit in 2009

National Bank of Fujairah returned to profit in 2009, despite a loss in 2008, a decline in operating income and exposure to the Al Gosaibi and Saad Groups of Saudi Arabia, the bank announced on Thursday.

NBF, which is 39 percent owned by the Government of Fujairah and ten percent owned by the Government of Dubai, recorded a profit of AED104.3m ($28.3m) last year, compared to a loss of AED50.3m ($13.6m) in the same period.

Operating income last year was AED506.5m, down 5.8 percent from AED537.9m in 2008. The bank attributed this to “the general slowdown in economic activity and higher cost of funds due to market conditions.”

NBF’s loan impairment charge rose 19.2 percent to AED214.3m, compared to AED179.7m in 2008. Over a third of this, or AED73m, was derived from its AED92m exposure to the Al Gosaibi and Saad Groups of Saudi Arabia.

“The Bank continues to be prudent and proactive in providing for potential loan losses in view of uncertain conditions,” the bank said of its loan impairment charges in 2009.

The bank’s investment in funds fell 75 percent from AED227.4m in 2008 to AED56.6m. The bank’s total assets at the end of the year stood at AED11.9bn, a slight drop of seven percent from the year before.

Sheikh Saleh Bin Mohammed Al Sharqi, chairman of NBF said: “This is a solid set of results in one of the most challenging economic environments we have ever seen. Following the full year loss in 2008, these results mark a welcome return to profitable operations.”