Abu Dhabi, 13 February, 2017 - Finance House Group (FH) has posted a Total Comprehensive Income of AED 65 million for the year ended 31 December 2016, which is 50% higher than the Total Comprehensive Income of AED 43.35 million achieved in the previous year.
On the back of a steady growth in the asset book and robust recoveries from non-performing loans, Net Interest Income, Income from Islamic Financing & Investing Assets and Net Income from Perpetual Instruments grew by a robust 23.6% to reach AED 245.4 million in 2016 compared to AED 198.4 million in the previous year. Net Fee and Commission income was up by 7.7% year on year, fueled in part by higher brokerage fees from a late surge in Q4 trading volumes in domestic equity markets.Net Insurance Income grew to AED 7.7 million in 2016 compared to AED 0.7 million in the previous year, aided by a sustained turnaround in the core operations of the insurance subsidiary.
Aggregate investment & other operating income from a well-diversified proprietary investment portfolio consisting of listed equity, private equity, fixed income and real estate assets grew by 13.7% to AED 85.3 million in 2016 compared to AED 75 million in the previous year.
Commenting on full year 2016 results, Mohammed Abdulla Alqubaisi, Chairman of Finance House said: “Despite challenging local, regional & global market conditions, we are proud to maintain our profitable stance for the twelfth successive year since inception. This is a tribute to the resilience of our sound business model and the robustness of our liquidity management and strategy execution capabilities”.
Net Loans & Advances as of 31 December 2016 including Islamic Financing & Investing Assets were flat at AED 2.23 billion, compared to AED 2.30 billion at the end of the previous year. The resultant Loans to Deposit ratio as of 31 December 2016 was a healthy 78.6%, reflecting both, a cautious approach to asset/liability growth and head room available for continued loan book growth in the immediate future.
FH’s loan loss provisioning policy continues to be conservative. Considering the challenging credit environment in the UAE, net impairment charge on loans and advances for the year 2016 has been stepped up to AED 121.77 million compared to AED 85.91 million in the previous year.
Total operating expenses at the consolidated level were higher by 7.7% in 2016 compared to 2015 mainly on account of hiring new employees and higher establishment costs, in line with increased business volumes across major business segments. Despite the absolute increase in total operating expenses, the Cost/Income ratio for 2016 was lower at 56.8% compared to 57.6% in the previous year, signifying improved overall operating efficiency.
FH Group continues to manage its liquidity in a prudent and conservative manner. Since the onset of the financial crisis in October 2008, FH has remained a net lender to the UAE inter-bank market and continues to maintain this position till date. Net cash and cash equivalents as at 31 December 2016 stood at AED 737.60 million, representing a robust 16.7% of Total Assets.
At the consolidated level, Shareholders’ equity as at 31 December 2016 stood at AED 953.75 million compared to AED 954.19 million at the end of the previous year. This is after distributing a cash dividend of 10% for 2015, amounting to AED 30.95 million and 7.5% coupon on the Tier 1 Sukuk amounting to AED 22.50 million. Capital adequacy ratio at the consolidated level as of 31 December 2016 stood at a robust 24.6% compared to 23.3% at the end of the previous year, providing a solid footing for sustained future growth in assets.
In January 2017, the investment grade Corporate Credit Ratings of Finance House were reaffirmed by Capital Intelligence, at “A3” Short Term and “BBB-” Long Term, both with a stable outlook.
“We look forward to 2017 with cautious optimism for sustained profitable growth, in line with our growth aspirations. Our strategy is sound and we have the necessary mechanisms and structures in place to exploit profitable opportunities, to adapt quickly to changing market conditions, to continue managing risks well and to maximize returns for our shareholders”, concluded Mr. Alqubaisi.