Dubai - July 18th 2006: National Bank of Fujairah (NBF) today announced its half year results for the first fiscal half year for the period ending 30th June 2006 where profits soared by 40 per cent to AED 105 million from AED 75 million in corresponding half year ended 30th June 2005.

The Bank’s financial statements for the half year consolidate, for the first time, results of its subsidiaries, NBF Financial Services and NBF Securities LLC. NBF Securities LLC, the brokerage subsidiary of NBF, marked commencement of business on 21 May 2006 when the first trade was executed on Dubai Financial Market.

Despite margins being under pressure in view of the rising interest rate scenario, net interest income rose by 54 per cent over the corresponding period last year on the back of strong growth in volumes which helped the Bank’s half year performance.

Half year results are driven by consistent and sustainable growth in core business despite being impacted by investment income. Second quarter performance registered a net profit growth of 16 per cent on the back of net interest income which rose by 47 per cent over the same quarter last year.

“Our second quarter results reflect the continued progress that the Bank is making with the core business growing satisfactorily” said Asad Ahmed, General Manager of the National Bank of Fujairah.

The Bank’s cost to income ratio improved to 29.96 per cent over the corresponding period last year of 32.84 per cent. General and administrative expenses increased by 22 per cent and 20 per cent respectively mainly on account of employee related cost, which reflects both the growing number of employees and the strengthening of management structure in line with the bank’s aggressive growth plans.

Earnings per share increased to AED 0.11 for half year as opposed to AED 0.09 for corresponding period in 2005, which have been restated to reflect the bonus issue and share split during 2006.

Return on average equity rose from 14.89 per cent in June 2005 to 15.45 per cent while return on average assets stood at 3.22 per cent for the interim period as opposed to 3.02 per cent in corresponding June 2005. Total shareholders’ equity as of 30 June 2006 stood at AED 1,444 million and the Bank’s capital adequacy ratio at period end remained healthy with the BIS ratio standing at 25 per cent against the Central Bank minimum of 10 per cent.

From non-financial perspective the half year marked a landmark when NBF signed agreement with Switzerland based Temenos for licensing and implementation of its Core Banking System, “T-24” in last month. The overhauling of IT infrastructure is part of the Bank’s future growth strategy for launching new products and enhancing customer services, in addition to expanding its network with its stated entry into the Retail Banking segment.