UAE’s top bank FAB cautious after flat second quarter profit

UAE’s top bank FAB cautious after flat second quarter profit

First Abu Dhabi Bank (FAB), the United Arab Emirates’ biggest lender, struck a cautious tone on the second half of the year on Thursday, as it reported broadly flat second quarter profit.

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Gulf banks have been supported by high crude prices, which historically boost economic activity in the oil-rich region. But they are increasingly wary of a possible global economic downturn as central banks hike interest rates to fight inflation.

“Although the supportive regional economic backdrop and the diligent execution of our strategy represent significant tailwinds, we remain cautious in the context of heightened market volatility, persistently elevated global inflation and rapidly evolving monetary policy,” James Burdett, group chief financial officer, said in a statement.

FAB made second quarter profit of $792 million (2.91 billion dirhams), just under 1 percent higher than a year earlier.

Arqaam Capital and EFG Hermes had forecast profit of about 2.8 billion dirhams.

The result was down 43 percent on the first quarter, when FAB posted its highest ever quarterly net profit, helped by the sale of a majority stake in its payments business Magnati.

FAB said net profit was up 13 percent on a quarterly basis when