Group financial performance in 2017
I summarize below the key financial outcomes of our actions for the year ended 31 December 2017:
- FH Group posted a Consolidated Net Profit of AED 32.6 million compared to AED 38.1 million in the previous year.
- Net Interest Income, Income from Islamic Financing & Investing Assets and Net Income from Perpetual Instruments weighed in at AED 196.6 million compared to AED 245.4 million in the previous year. Robust one-off recoveries from non-performing loans & advances significantly boosted Net Interest Income in the previous year.
- Net Fee and Commission income was marginally lower at AED 47.5 million compared to AED 48.0 million in the previous year. Subdued trading volumes in domestic equity markets during 2017 translated to lower brokerage fees at our local stock broking subsidiary.
- Net Insurance Income grew smartly to AED 12.7 million compared to AED 7.7 million in the previous year, aided by the sustained turnaround in the core operations of our insurance subsidiary.
- Aggregate investment & other operating income was lower at AED 39.3 million in 2017 compared to AED 59.9 million in the previous year primarily on account of the lacklustre performance of domestic equity markets in 2017 and consequential marked to market reductions in the values of our domestic equities trading portfolio.
- Net Loans & Advances including Islamic Financing & Investing Assets registered a robust growth of 12.3% to reach AED 2.51 billion as of 31 December 2017, compared to AED 2.23 billion at the end of the previous year.
- Customers’ Deposits & Margin Accounts grew to AED 2.95 billion as at 31 December 2017 compared to AED 2.84 billion at the end of the previous year. The resultant Loans to Deposits ratio as of 31 December 2017 was a healthy 85%, reflecting both our cautious approach to asset/liability growth and head room available for loan book growth in the immediate future.
- Total operating expenses at the consolidated level were higher by 4.9% in 2017 compared to 2016 mainly on account of a planned and systematic increase in customer facing sales force, to boost sales volumes across all business lines. Robust top line growth witnessed in corporate & commercial coverage, retail finance & insurance business portfolios in 2017 were a direct result of this strategy execution.
- Net cash and cash equivalents as at 31 December 2017 stood at AED 688.6 million, representing a healthy 15.1% of Total Assets.
- Capital adequacy ratio at the consolidated level as of 31 December 2017 stood at a robust 22.4% compared to 24.6% at the end of the previous year, providing a solid footing for sustained future growth in assets.