Finance House posts $17m profit
Abu Dhabi, January 30, 2012
Abu Dhabi-based Finance House has reported a consolidated group net profit of Dh63.2 million ($17.2 million) for the year ended December 31, 2011.
This translates to an earning of 21 fils per share. The bank's total assets grew to Dh3.31 billion, representing an increase of nearly 6 per cent over the figure of Dh3.12 billion as at December 31, 2010.
Finance House said its net interest income from core business activities in 2011 has been relatively stable at Dh 112 million compared to Dh117.5 million in 2010.
The marginal decline in Net Interest Income was in part due to lower interest earned on inter-bank placements where interest rates remained subdued for the most part of 2011 in comparison to 2010.
The net fee and commission income from core business activities registered a healthy growth of nearly 18 per cent, increasing to Dh23.8 million in 2011 from Dh20.2 million in 2010.
Commenting on the results, chairman Mohammed Alqubaisi said: “Despite challenging market conditions and significantly tighter regulatory requirements, we are proud to maintain our profitable stance for the seventh successive year since inception.'
For a genuine private sector enterprise operating in the fiercely competitive UAE financial services sector, this is indeed a creditable achievement,' he noted.
During the year, customer deposits continued to grow steadily to reach an all time high of Dh1.62 billion as at December 31, 2011 compared to Dh1.57 billion the previous year.
“This is a remarkable achievement, especially in the back-drop of tighter liquidity witnessed in the inter-bank market during the fourth quarter of 2011 and bears testimony to the continued confidence that the market places in Finance House,” Alqubaisi added.
According to him, the loans and advances as at 31 December 2011 grew to Dh1.21 billion compared to Dh 1.12 billion at the end of the previous year.
“Our loans to deposit ratio stood at 75 per cent compared to 71 per cent in the previous year, reflecting both our cautious approach towards loan book growth during 2011 and the significant head room available for loan book growth in 2012 and beyond,' he added.
Earlier in the year, Finance House had successfully launched (through an IPO) Insurance House, a public joint stock company engaged in providing insurance services and in which it holds a significant stake.
This, said Alqubaisi, was a key strategic investment for the long haul.
'Notwithstanding the negative returns in 2011 from this start-up venture, we are confident of the profitable future growth potential of this investment, which should contribute handsomely to the FH Group bottom-line on a sustained basis, going forward,' he added.
The board has recommended a cash dividend of 10 per cent subject to regulatory approvals. The dividend recommendation will result in 52 per cent of the net profit for the year being retained as part of Shareholders’ equity to support future growth.
On the future plans, Alqubaisi said, 'We look forward to 2012 with optimism and are clearly poised for profitable growth as economic activity gathers momentum.'
'Our strategy is sound and we have the necessary mechanisms & structures in place to exploit profitable opportunities, to continue managing risks well, and to maximize returns for our shareholders,' he added.-TradeArabia News Service
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