01st May 2006
Bank continues on aggressive growth plans; Earning per share increased to AED0.06 opposed to AED 0.04 for March 2005 quarter

National Bank of Fujairah (NBF) today announced results for the first fiscal quarter for the period ending March 31 st 2006, when profits soared by 67 percent to AED59 million from AED35 million in the corresponding March 2005 quarter. The strong results are backed by healthy and sustainable volumes. Net interest income rose by 63 percent over March 2005 quarter. The bank, however, recorded a marginal decline in its interest spread reflecting a change in portfolio growth mix coupled with rising interest rate scenario.

Commenting on the results, Mr. Asad Ahmed, General Manager of the National Bank said: "This past quarter reflects the long term strength of the bank moving forward and our strategic investments over the past years  enable us to  seize new opportunities.  Our commitment to create benefit for our shareholders is always a top priority and we believe that these results adhere to that policy."

Shareholders had approved the 1:100 share split in an extra-ordinary general meeting on 12 March 2006 whereby each shareholder having 1 share of a face value of AED 100 received 100 shares of a face value of AED 1 each.  The same Extra-ordinary General Meeting had also approved a 10.53% bonus issue raising the Bank's paid up capital of Dhs 1 billion.

"With a strong capital base and support medium term funding in place, The Bank is well prepared to continue its growth in both traditional areas of strength and new lines of business" added Asad Ahmed, referring to the completion of a US$130 million Term Loan Facility in London signed in December 2005.

The Facility, which launched at US$100 million was oversubscribed in early syndication resulting in the Facility being increased to US$130 million. The three-year facility is intended to be used by NBF for general funding purposes.

Return on average equity rose from 14.29 percent in March 2005 quarter to 17.03 percent. Following the  first quarter results, the bank's share capital rose to AED1 billion and total shareholders' equity as of 31 March 2006 stood at AED1,398 million. Earnings per share have also been adjusted to reflect the share split and bonus issue of shares. Earning per share increased to AED 0.06 for March 2006 quarter as opposed to AED 0.04 for March 2005 quarter.

Income from investments and fees and commission increased by 35% and 48% respectively. General and administrative expenses increased by 23% mainly on account of employee related cost, which reflects both our growing number of employees and the strengthening of management structure in line with the bank's aggressive growth plans.

The bank's capital adequacy ratio at period end remained healthy with the BIS ratio standing at 21.22% against the Central Bank  minimum of 10%.

The UAE Central Bank issued a license on 14 March 2006 for the Bank's brokerage subsidiary, NBF Securities LLC which is expected to commence operations in May 2006 as soon as all licensing and approval formalities are completed.

During the quarter three new branches at Musaffah, Masafi and Qidfa were opened which will enhance market reach of the Bank.