First Abu Dhabi Bank posts record quarterly profit

UAE's First Abu Dhabi Bank (FADB) posted its highest profit since its inception five years ago in the first three months of 2022. The bank posted a net profit of Dh5.12 billion, the equivalent of $1.39 billion, in the first quarter of the year backed by the sale of a stake in its Maganti payments subsidiary.

FADB's revenues grew by 106% from the Dh2.48 billion ($680 million) earned in the previous year. The bank's quarterly profits also reached record levels in the last quarter of last year. James Burdett, chief financial officer of First Abu Dhabi Bank, described the bank's results as "good" in a statement on its website. In the same statement, James Burdett said that the Emirati bank achieved growth in all sectors of financial activity, especially during the first quarter of 2022.

First Emirate Bank's total revenues have reached 7.3 billion Emirati dirhmas, around $200 million, which includes the proceeds from the sale of a stake in Maganti, the UAE's leading government solutions market and a major player in direct purchase, prepaid issuance and issuer processing, whose main objective is to increase its profits in future business.

This increase in profits comes at a sweet time for First Abu Dhabi Bank. "This comes as we continue to make remarkable progress on our growth strategy and various transformation and development initiatives, in line with our long-term plans to deliver the best sustainable value to our shareholders, customers and employees," James Burdett said during his web message. In this line of business, Brookfield Business Partner, a Canadian business services and industrial operations company, agreed to purchase 60% of the Emirati entity's payments unit in early March. The deal is valued at $1.15 billion, with First Abu Dhabi retaining the remaining stake.

The move adds to a long series of deals by the Emirati bank with companies in the payments industry, as the banks aim to compete with other specialised service providers and phase out other operations.

The UAE's largest bank made a $1.2 billion bid for a majority stake in Hermes, the Egyptian financial giant, last February. However, two months later, the Emirati group decided to withdraw the offer, which was still at the non-binding stage, due to the uncertainty and instability of the market at the time, according to the bank itself. 

Another transaction by First Abu Dhabi Bank, which this time was completed, was the purchase of Beirut-based Bank Audi. The Emirati entity took over this Egyptian financial services company, which specialises in the personal banking, commercial banking, private banking and treasury and capital markets segments, during 2021. This purchase helped to increase First Abu Dhabi Bank's annual revenues by 6%.

First Abu Dhabi Bank was born in 2017 from the merger of two large banking entities: First Gulf Bank and National Bank of Abu Dhabi. It has already established itself as the country's largest bank.