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Having posted a loss of US$13.7mn in 2008, the National Bank of Fujairah (NBF) was recently able to announce much better news: a net profit of US$28.4mn in 2009.
This is no mean feat given the still shaky state of the global economy in general and the provisioning that the bank was said to have needed to make for its exposure to the troubled Al Gosaibi and Saad Groups of Saudi Arabia in particular.
Bank spokesmen welcomed a return to profitable operations and noted that the bank intended to continue with, “a prudent approach in these unprecedented market conditions”.
However, even this performance could not entirely avoid some evidence of the effects of slowing economic activity and the rising cost of funds caused by the more risk-averse market, so that a fall in the bank’s operating income to US$137.9mn (as compared to US$146.4mn in 2008) was also recorded. “The liquidity cost in the market continues to be at unprecedented levels and has had a negative impact on net interest income and profit,” a statement said.
However, investment income of US$10.2mn compared to a loss of US$61.8mn in the same period last year was a highlight of the results, which, the bank said, reflect the strength of its core customer base and were achieved despite difficult credit conditions during the year, or as chairman, H.H. Sheikh Saleh Bin Mohammed Al Sharqi, put it: “This is a solid set of results in one of the most challenging economic environments we have ever seen.