First Gulf Bank sees Q2 net profit up 13%

Abu Dhabi-backed lender made a net profit of AED890m for three-month period
First Gulf Bank sees Q2 net profit up 13%
FGB is the UAEs second largest lender by market value
By Reuters
Wed 13 Jul 2011 05:23 PM

First Gulf Bank (FGB), UAE's second largest lender by market
value, posted a 13 percent rise in second quarter net profit, beating analysts'
forecasts, helped by a rise in net interest income.

The lender, majority owned by Abu Dhabi's ruling family,
made a net profit of AED890m ($242.5m) for the three month period ending June
30, compared with AED787m in the prior-year period.

Profit for the first six months of the year grew 3.4 percent
over the same period last year to AED1.77bn.

"Our strong business fundamentals coupled with the
strong growth in our business operation, will now place us in a firmer position
to increase lending to the targeted sectors in the coming quarters of 2011 and
beyond," said Andre Sayegh, FGB's chief executive officer.

Net interest and Islamic financing income grew to AED1.22bn in
second quarter, up 17 percent over the prior year period. This represented 77
percent of the bank's operating income and offset an 18 percent drop in fees
and commissions during the quarter.

Provisions for non-performing loans declined 4 percent in
the first half to AED870m, the bank said.

In June, FGB said it would raise its foreign share ownership
limit to 25 percent from 15 percent to attract more investors.

FGB also launched a $3.5bn Islamic bond or sukuk, according
to a prospectus filed at the London Stock Exchange.

Shares in FGB ended flat on Wednesday prior to the results.
The stock has risen 2.1 percent so far this year.

For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.