First Abu Dhabi Bank (FAB) Q2 2024 earnings summary

Executive summary

• H1'24 net profit reached AED 8,427 million, up 3% year-over-year, driven by strong revenue, operating efficiency, and risk discipline despite UAE corporate tax impact.

• Revenue rose 16% year-over-year to AED 15,726 million, with broad-based growth across divisions and geographies, and margin expansion for the fourth consecutive quarter.

• ROTE delivered at 17.3%, aligning with 2024 and medium-term guidance.

• Total assets increased to AED 1,174,619 million as of 30 June 2024, up from AED 1,168,633 million at year-end 2023.

• Robust asset quality, liquidity, and capital with CET1 at 14.0% as of June 2024.

Financial highlights

• H1'24 net profit AED 8,427 million (+3% yoy); Q2'24 net profit AED 4.3Bn (+1% yoy, +3% qoq).

• H1'24 operating income AED 15,726 million (+16% yoy); Q2'24 AED 7.8Bn (+14% yoy, -3% qoq).

• Net interest income for H1'24 AED 9,763 million (+11% yoy); non-interest income AED 6.0Bn (+26% yoy).

• Cost-to-income ratio improved to 24.4% in H1'24 (from 25.2% in H1'23).

• Earnings per share for the six-month period was AED 0.73, up from AED 0.71 in the prior year.

Outlook and guidance

• Upgraded 2024 loan growth guidance to mid-to-high single digits (from mid-single digit), with 6% YTD loan growth.

• ROTE guidance maintained at >16%; H1'24 actual at 17.3%.

• CET1 guidance >13.5%; H1'24 actual at 14.0%.

• UAE real GDP growth forecast at c.4.5% for FY24 and c.5.4% for FY25.

• Management expects no material tax liability under the new UAE corporate tax law and continues to monitor regulatory developments.