First Abu Dhabi Bank To Enter Commercial Banking In Saudi Arabia

Abu Dhabi: First Abu Dhabi Bank (FAB), the largest bank in the UAE by assets, is stepping up its presence in Saudi Arabia by venturing into commercial banking, a top executive of the bank said in Abu Dhabi.

FAB has already secured a licence from the Capital Markets Authority of Saudi Arabia to start investment banking.

“We submitted the application for commercial banking with SAMA [the Saudi Arabian Monetary Authority]. We think that the year 2018 is going to be the year for us to establish physically in Saudi Arabia and open a branch,” said Karim Karoui, group head of subsidiaries, strategy and transformation at FAB, while addressing the bank’s annual general meeting in Abu Dhabi on Sunday.

Andre Sayegh, Deputy group CEO, said: “The two economies are very much linked. We have a lot of connections between Saudi companies in the UAE and vice versa. It makes sense for the bank to be present in Saudi Arabia.”

Speaking about the outlook for 2018, James Burdett, group chief financial officer said FAB expects mid-single digit growth for its balance sheet.

FAB, which held a roadshow for a sukuk recently in London, decided not to go ahead with issuing it due to volatile market conditions.

“The Dow fell off by 600 points or something, volatility spiked in the market considerably and the environment wasn’t conducive for doing a deal,” Burdett said.

Sayegh also said the full integration of the two banks that make up FAB — First Gulf Bank (FGB) and National Bank of Abu Dhabi (NBAD) — will be completed by the end of 2018.

Dividend

During the AGM, the bank approved the distribution of 70 per cent cash dividends (Dh0.70 per share) for registered, entitled shareholders for the financial year ended December 31, 2017.

The bank last month reported Dh10.9 billion in net profit for 2017, down 3.5 per cent year-on-year on the back of the bank spending Dh601 million on merger-related costs.

The bank’s revenues also fell in 2017, reaching Dh19.5 billion — down 4 per cent year-on-year, with FAB attributing that to “softer market conditions and portfolio optimisation.”

FAB was created from the merger of FGB and NBAD and the new entity became operational from April 1, 2017.