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National Bank of Fujairah PJSC (NBF) -
Operating profit and income up over 8% exhibiting resilient business performance and effective asset and liability management

NBF is pleased to announce its results for the year ended 31 December 2019 in accordance with the approval received from the Central Bank of the United Arab Emirates (CBUAE).


• Operating income at AED 1.7 billion experienced a growth of 8.5%. This was driven by a high level of resilience in the bank’s core business with good volume growth, enhanced balance sheet management and effective pricing strategies seeking to mitigate the margin compression across the global economy. Net interest income and net income from Islamic financing and investment activities grew by 6.0% and net fees, commission and other income by 10.9% compared to 2018. Income from investments and Islamic instruments marked a significant bounce back with a fair value gain of AED 10.8 million compared to a fair value loss of AED 5.0 million in 2018. Foreign exchange and derivatives income saw a growth of 10.1% to reach a record level of AED 151.2 million compared to AED 137.3 million in 2018.

• Operating expenses increased by 7.9%, reflecting NBF’s investments in digital initiatives and the bank’s infrastructure to improve customer service and competitiveness in line with changing market demands. Nevertheless, the cost-to-income ratio improved to 33.0% compared to 33.2% in 2018.

• NBF achieved a strong operating profit of AED 1.15 billion which increased by 8.9% compared to AED 1.05 billion in 2018.

• The strong operating performance supported NBF’s prudent loan loss provisioning policy in response to the continued slow-down and credit stress in the market as well as embedding ‘IFRS 9 – Financial Instruments’ provisioning accounting standard. NBF secured net impairment provisions of AED 593.0 million compared to AED 436.8 million in 2018. Total provision coverage ratio (including impairment reserves) improved to 107.3% from 102.0% as at 31 December 2018. The NPL ratio stood at 5.44% compared to 5.13% as at 31 December 2018.

• NBF posted a net profit of AED 552.2 million compared to AED 615.3 million in 2018, depicting a decline of 10.3% after absorbing the elevated level of provisions. While, NBF’s total comprehensive income for the year was AED 611.5 million up 4.5% compared to AED 585.4 million in 2018 on the back of improvement in investments designated as fair value through other comprehensive income (FVOCI) by AED 59.3 million in 2019.

• Loans and advances and Islamic financing receivables rose 3.4% from AED 26.2 billion at 2018 year end to AED 27.1 billion.

• Investments and Islamic instruments were up by 24.1% from AED 2.7 billion at 2018 year end to AED 3.4 billion.

• Customer deposits and Islamic customer deposits depicted a growth of 4.8% at AED 31.9 billion compared to AED 30.5 billion at 2018 year end.

• Total assets rose by 7.6% to reach AED 42.8 billion from AED 39.8 billion at 2018 year-end.

• Shareholders’ equity rose 24.0% from AED 5.1 billion at 2018 year-end to AED 6.4 billion on the back of successful issuance of Additional Tier 1 (AT1) capital securities of US($) 350 million. Accordingly, capital adequacy significantly improved to 17.8% (Tier 1 ratio of 16.6% and CET 1 ratio of 12.9%) from 15.2% (Tier 1 ratio of 14.1% and CET 1 ratio of 12.6%) in 2018.

• Strong liquidity was maintained with lending to stable resources ratios at 85.9% (2018: 86.5%), eligible liquid assets ratio (ELAR) at 21.7% (2018: 21.9%) and advances to deposits ratio at 84.8% (2018: 86.0%), well ahead of all CBUAE minimum requirements.

• Return on average assets was 1.3% compared to 1.6% in 2018.

• Return on average equity was 9.6% compared to 12.3% in 2018.

• A distribution of profits of 13.5% has been recommended in the form of cash dividends of 10.0% (2018: 7.5%) and bonus shares of 3.5% (2018: 12.5%) of the paid-up capital.

H.H. Sheikh Saleh Bin Mohamed Bin Hamad Al Sharqi, Chairman said: “The Board is pleased with the resilient performance, robust liquidity, solid capital adequacy and healthy returns achieved this year in the face of a difficult operating environment. Our core business, balance sheet strength and agile operating platform secure the foundation for our future progress and position NBF well to deal with the rapidly changing economic and regulatory environment. The Board is confident about the Group’s opportunities as we move into 2020 with a clear strategy to reliably support quality businesses and our customers as well as to maintain focus on long term sustainable results and maintaining the financial stability of the Group. We have been honoured with a number of prestigious awards and endorsements received over the years, and 2019 was an exceptional year for external appreciation underscoring NBF’s long outstanding culture of service excellence and client partnership.

Taking into account the 2019 performance and the current market conditions, I, on behalf of the Board of Directors, am pleased to recommend a distribution of profits of 13.5% (2018: 20.0%) in the form of cash dividends of 10.0% (2018: 7.5%) and bonus shares of 3.5% (2018: 12.5%) of paid-up capital.

I want to place on record the Board’s appreciation and acknowledge NBF’s increasingly significant role in the development of Fujairah and the United Arab Emirates. Finally, I would like to thank our customers, shareholders and investors for their staunch support and our dedicated staff for their tremendous efforts in building the Group.”

H.E. Sir Easa Saleh Al Gurg, KCVO, CBE Deputy Chairman said: “Our 2019 results underscore the Group’s ability to deliver real value to our customers and to support them as a consistent, reliable and transparent partner. This has been clearly appreciated in a global environment experiencing such heightened unpredictability and change. Our segmented focus and comprehensive set of products and service channels coupled with our customer centric business model helped us achieve consistent business and revenue growth in a subdued operating environment.

Our investments and efforts in making our operating platform efficient and digitally enabled are reaping great results and is evidenced by our improving cost to income ratio despite the continued investments in skill-set, infrastructure and technologies for improving our customer service delivery. We are confident that by maintaining a resolute focus on risk management, financial prudence and sustainability, effective execution and transparency, the Group will continue to make worthy progress over the coming years.”