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UPDATE 1-Newly-merged UAE bank posts 12 pct rise in Q1 profit
April 19, 2017 / 3:46 PM / 7 months ago

UPDATE 1-Newly-merged UAE bank posts 12 pct rise in Q1 profit

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DUBAI, April 19 (Reuters) - National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB), which merged on April 1 to create one of the largest banks in the Middle East and Africa, posted on Wednesday a 12.4 percent rise in combined “pro-forma” first quarter net profit.

Pro-forma net profit reached 2.93 billion dirhams ($797.80 million) in the three months to March 31, they said in a statement, up from 2.60 billion dirhams in the year earlier period.

Analysts only provided forecasts for the two separate lenders - 1.31 billion dirhams for NBAD and 1.41 billion dirhams for FGB, according to the average estimates of three analysts polled by Reuters.

The combined bank plans to adopt its new name, First Abu Dhabi Bank, after shareholders approve the change at its general assembly meeting on April 24, it said.

The pro-forma results were boosted by a 145.5 percent rise in “other non-interest” income to 1.20 billion dirhams from the year earlier period. That helped offset a 4.9 percent slip in net interest and Islamic financing income to 3.21 billion dirhams, as well as a 14.7 percent slide in net fees and commissions to 799 million dirhams.

Operating expenses for the bank rose by 5.7 percent to 1.53 billion dirhams, while impairment charges dipped 3.9 percent to 645 million dirhams.

Announced in June last year, the merger is expected to produce cost savings of 500 million dirhams.

The newly-merged bank made up to 20 job cuts in its global markets division, sources told Reuters this month.

It was the second bank to report earnings on Wednesday after Emirates NBD, Dubai’s largest lender, which reported a 4 percent rise in first-quarter net profit to 1.87 billion dirhams.

$1 = 3.6726 UAE dirham Reporting by Tom Arnold; Editing by Saeed Azhar and Mark Potter

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