Abu Dhabi's second-largest lender by market value, First Gulf Bank (FGB), has reported its seventh consecutive record profit in the first-quarter of 2008.

The bank’s income in the three months to March 31 rose 66 per cent to $183.8 million. The net income in the year-earlier period was Dh405.9 million ($110.5 million), the bank said in a statement.

Earnings per share climbed 53 per cent to Dh0.49 and non-interest income more than doubled over the year-earlier period to Dh600 million, the bank said.

“The bank’s consistent growth quarter after quarter demonstrates the clear and well-thought strategy. It reinforces FGB’s position as one of the best performing organisations in the Emirates,” said FGB chief executive officer André Sayegh.

Growth has again been recorded across the bank’s core businesses, subsidiaries and associate companies, which all contributed to the income of the FGB Group.

The banking revenue, generated by the main businesses – Corporate, Retail, Treasury and Investments – contributed to 69 per cent of the total revenue of the group, while the remaining 31 per cent was contributed by the two subsidiaries and the three associate companies of FGB.

“These results reflect the Board’s vision and the management’s ongoing strategy of diversifying the bank’s stream of revenue. We remain focused on the planned organic growth of our core banking business and the strengthening of our complementary businesses in merchant banking, equity brokerage, real estate and Islamic finance mortgages. Subsidiaries and associate companies are becoming fully integrated and represent core income for the entire FGB Business Group” Sayegh stated.

The total operating income of Dh1,023 million increased by 81 per cent over the same period of last year.

This was the result of the net interest income increasing from Dh275 million in Q1 2007 to Dh423 million in 2008, a 53 per cent increase, and the Non-interest income more than doubling compared to first quarter in 2007, reaching Dh600 million.

The bank has shown a strong balance sheet at the end of March 2008, with total assets at Dh79 Billion growing by 56 per cent from March 2007, Loans and Advances at Dh54 Billion and Customers’ Deposits at Dh51 Billion increasing by 87 per cent and 41 per cent respectively from the same period of last year.

“With the growing size of the balance sheet, the bank has consistently maintained excellent profitability and efficiency ratios, with annualised return of average assets rising to 3.5 per cent, annualised return on average equity increasing to 23.8 per cent and Cost to Income Ratio at a level as low as 20.4 per cent,” added Sayegh.

In order to further strengthen the balance sheet to support future growth, and following the approval from the recently held Shareholders’ Extraordinary General Meeting to issue Convertible Bonds, FGB’s management will chose the best option available in both local and international markets to continue the diversification of its sources of funds.

On the retail side, FGB continues to enhance its products and offerings. During the first quarter, the bank launched the new Chip Debit MasterCard, which is a more secure and convenient card that replaced the bank’s existing ATM cards.

The new card is accepted at more than 25 million locations globally and can be used to withdraw cash at more than one million ATMs around the world, the bank said.

FGB has also signed an agreement with the Dubai Land Department, which approves the bank to open and manage escrow accounts for the department’s registered property developers. – TradeArabia News Service