First Abu Dhabi Bank, the UAE's largest lender by assets, reported higher-than-expected second-quarter profits on Thursday, helped by growth in interest and non-interest income.
Net profit attributable to shareholders amounted to 4.26 billion dirhams ($1.16 billion), up 1 percent from 4.21 billion dirhams a year earlier.
This exceeded analysts' average expectations of Dh3.98 billion, according to data from the London Stock Exchange Group.
“In light of maintaining good lending rates since the beginning of the year, we benefited from the continued improvement in margins for the fourth consecutive quarter,” Lars Kramer, Group Chief Financial Officer, was quoted in a statement as saying.
He added that this reflects the careful management of the balance sheet and the ability to choose optimal activities that anticipate any shifts in interest rates.
Banks in the UAE are benefiting from growth prospects in the Gulf region, as governments in the region boost investment in developing non-oil sectors and diversifying sources of income.
It also received support from higher US interest rates because most of the region's currencies are pegged to the dollar.
The bank's net interest income, the difference between profit on loans and payments on deposits, rose 11 percent to Dh9.8 billion in the first half of the year, while net interest margin stood at 1.96 percent in the April-June period, up for the fourth consecutive quarter.
The bank said loans, advances and Islamic financing rose 6 percent in the first half, adding that factors such as fees from trade, loans and credit cards led to a 26 percent increase in non-funded income.
Customer deposits grew by one percent to Dh766 billion compared to the previous year, despite falling five percent since the end of March.
The bank said its total assets grew by one percent to Dh1.2 trillion as of June 31, citing strong growth in business volume across sectors and geographies.
