First Abu Dhabi Bank (FAB) Q4 2023 earnings summary

Executive summary

• FY'23 net profit reached a record AED 16.4Bn, up 22% YoY and 56% on an underlying basis excluding the subsidiary stake-sale gain; core revenue momentum, cost discipline and risk management supported results.

• Broad-based growth across businesses, products, geographies and income sources; balance-sheet growth and strong liquidity supported the outlook for sustainable growth and returns.

Financial highlights

• FY'23 operating income was AED 27.471Bn, up 32% YoY; net interest income rose 27% to AED 18.102Bn and non-interest income rose 41% to AED 9.370Bn.

• FY'23 net profit was AED 16.405Bn vs AED 13.411Bn; excluding the AED 284Mn subsidiary stake-sale gain, net profit was AED 16.122Bn vs AED 10.317Bn.

• FY'23 basic EPS was AED 1.43 vs AED 1.18; operating expenses increased 6% to AED 7.125Bn, while net impairment charges rose 8% to AED 3.078Bn.

• Q4'23 net profit was AED 4.011Bn, up 63% YoY but down 6% QoQ; underlying net profit rose 51% YoY, with the QoQ decline reflecting higher impairment charges.

Outlook and guidance

• 2024 guidance: mid-single-digit loan growth, cost of risk of 65–75bps, provision coverage above 90%, ROTE above 16% and pre-dividend CET1 above 13.5%.

• 2024 macro outlook: oil at ~USD 80/b, UAE real GDP growth ~4.5% vs 3.7% in 2023, continued non-oil expansion and three expected rate cuts in H2'24.

• Medium-term ROTE target remains above 16%; priorities include business diversification, UAE leadership, international expansion, technology investment and sustainability.