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Bank FAB's quarterly profit in UAE drops slightly, but still beats expectations

First Abu Dhabi Bank, the UAE’s largest bank by assets, announced a net profit for the first quarter of 5,01 billion dirhams (US$1.36 'billion), down 2% from last year, but operating profit and operating income both increased.

The Iran war has caused a global disruption in energy supplies and damaged energy infrastructure. This has affected oil and?gas producers in the?Gulf?.

The bank stated that net profit was impacted by 300 million dirhams in "prudent managerial overlays" and that, without these overlays net profit increased by 3% year-on-year.

The lender stated that the net impairment charges increased from 724 million dirhams to 1.1 billion, including the overlays "in response to an evolving external environment". The lender did not provide any further information.

LSEG data shows that the quarterly profit was still higher than analysts' expectations of 4,38 billion dirhams.

Last month, the UAE Central Bank announced measures to support banks' liquidity. These included?an enhanced access to reserve balances up to 30% of cash reserve requirements and term liquidity in both dirhams (the local currency) and U.S. dollar.

Bank FAB's Operating Income grew by 6% to 9.34 billion Dirhams over the previous year period, while the operating profit grew by 5%.

Deposits rose by 4% and loans grew by 8%. At the end of March total assets had reached 1,49 trillion dirhams, up 6% on a year-to-date basis.

"We will continue to focus our efforts on our strategic goals, using a diversified funding base, strong capital position and liquidity buffers to navigate the global market from a place of strength," said Group CEO Hana Al-Rostamani in a press release.

According to LSEG data, Bank FAB is owned by Mubadala, the sovereign fund of Abu Dhabi and by the Abu Dhabi royal family.

The International Monetary Fund has revised its UAE growth forecast to 3.1% by 2026. This is almost 2 percentage points lower than the previous October's estimate. Next year, it expects a 5.3% increase.

(source: Reuters)