UAE's First Gulf Bank posts 12% rise in Q1 profit

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First Gulf Bank, the second-largest lender in the UAE by market value, posted a 12 percent increase in first-quarter net profit on Monday but missed the average forecast of analysts.

FGB made a net profit of AED1.05bn ($285.9m) in the first three months of 2013, up from AED934.7m in the same period of last year.

Five analysts polled by Reuters had on average expected a profit for the period of AED1.1bn.

The bank attributed the profit increase to a 6 percent hike year-on-year in net interest and Islamic financing income, which reached 1.38 billion dirhams in the opening quarter of 2013. Total revenue was up 12 percent to 1.87 billion dirhams.

However, bad loan provisions for the first quarter were AED433.3m, up from the AED412.7m in the corresponding period of 2012.

Compared to the end of 2012, loans and advances were up 3 percent while deposits were flat.

"FGB is off to a highly positive start in 2013. Our priority remains solid control on balance sheet management, simultaneously factoring a consistent and paced growth," chief executive Andre Sayegh said in the statement.

In early March, FGB fully repaid the AED4.5bn of federal government funds that it had received as support in the wake of the global financial crisis.

Banks in the UAE have posted strong profit growth for the first quarter, with National Bank of Abu Dhabi and Dubai's Emirates NBD reporting year-on-year increases of 36 and 31 percent respectively.

Confidence in the banking sector has helped boost the UAE stock markets, which are at multi-year highs. FGB itself was up 30.6 percent year-to-date at the end of share trading on Sunday.

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