UAE biggest lender's profit beats expectations despite Iran war

DUBAI – The UAE's biggest lender First Abu Dhabi Bank announced stronger-than-expected quarterly earnings on Thursday in its first earnings report since the war with ‌Iran that has shaken the regional and global economy.

The bank reported a 2 percent drop in first-quarter net profit and higher impairment charges although operating profit and operating income both rose.

Its quarterly net profit of 5.01 billion dirhams ($1.36 billion) beat an analysts' forecast of 4.38 billion dirhams, according to LSEG data.

Shares traded 0.8 percent lower by around 0840 GMT, slightly underperforming a 0.5 percent drop in Abu Dhabi's ⁠index. 

The conflict in the Middle East that began with US and Israeli airstrikes on Iran at the end of February has led to unprecedented disruption of energy supplies and it is uncertain whether a ceasefire can hold.

Without specifically mentioning the war, FAB, the UAE's biggest bank by assets, said that net impairment charges increased to 1.1 billion dirhams, from 724 million dirhams a year ago. ​They included 300 million dirhams of "prudent management overlays" which were "in response to the evolving external environment."

Excluding the overlays, net profit grew by 3 percent year-on-year, the bank said.

"We continue to focus on our strategic priorities, leveraging ‌our ⁠strong capital position, liquidity buffers, and diversified funding base to navigate the global environment from a position of strength," Group CEO Hana Al Rostamani said in a statement.

The International Monetary Fund projects UAE growth at 3.1 percent in 2026, almost 2 percentage points below its forecast last October, and expects growth to accelerate to 5.3 percent next year.

The UAE ⁠Central Bank has announced measures to support banks' liquidity.

FAB, which is almost 40 percent owned by Abu Dhabi sovereign fund Mubadala and nearly 20 percent by the Abu Dhabi royal family, according to LSEG data, said its operating income grew 6 percent over ⁠the prior-year period to 9.34 billion dirhams while operating profit was up 5 percent in the same period.

Loans grew 8 percent in the quarter and deposits rose 4 percent, bringing total assets to 1.49 trillion dirhams at ⁠the end of March, up 6 percent year to date.

Dubai's Emirates NBD bank reported an impairment charge of 865 million dirhams, but a rise in its quarterly net profit drove its shares up by around 0.7 percent on Thursday.