Very little went wrong for First Abu Dhabi Bank in 2021. The UAE-based lender rarely put a foot wrong. It reacted well to the pandemic, using its capital buffers and some state aid to support its clients.
Good planning put it in the right place to benefit from an inevitable economic upswing. Long-term investments in digital paid off, and its investment banking team was kept busy in a standout year for Middle East capital markets.
“It has been a very strong year for us,” Martin Tricaud, group head of investment banking at FAB, tells Euromoney.
Financial results tell the story. The UAE’s biggest bank by assets posted a 26% year-on-year rise in net profit in the first nine months of the year, to Dh9.2 billion ($2.51 billion). Revenues rose 17% over the same period, to Dh16 billion.
That included a particularly strong third quarter, when the bank delivered a 54% year-on-year rise in net profit, to Dh3.9 billion. Non-interest income more than doubled over that period to Dh3.3 billion as the region began to bounce back.
On November 11, Fitch Ratings affirmed FAB’s long-term issuer default rating at AA- with a stable outlook, reflecting a high level of support from the UAE and Abu Dhabi authorities.
Fitch described the bank’s “robust” funding and liquidity profile as a “rating strength”.
It added: “State and public-sector companies maintain large accounts with the bank, underpinning the bank’s funding base.”
FAB’s status as Abu Dhabi’s national champion gives it useful cost of funding and business advantages, which it uses to great effect in tough times.
But it is more than ‘just’ a state winner. A handful of other regional banks may outpace it in innovation, but it has invested well and wisely in digital.
Its investment banking team stole the show this year. It was one of four lenders (and the only one based in the UAE) picked as joint global coordinators on Adnoc Drilling’s $1.1 billion initial public offering in October, the Emirates biggest ever listing.
We put in a very strong trading performance, and on the client side, it has been the strongest year in ECM in a long time
Martin Tricaud
A few weeks later, state energy firm Fertiglobe Holding and Amsterdam-based OCI raised $795 million by listing their regional fertiliser joint venture, drawing $17 billion in orders. Again, FAB was the only regional lender chosen to manage the sale.
“We put in a very strong trading performance, and on the client side, it has been the strongest year in equity capital markets in a long time,” Tricaud says.
He adds: “I don’t know if [next year will be stronger than 2021] but it will be strong. The amount of liquidity available in the region, allied to strong oil prices, will underpin the equity markets and ensure a steady pipeline of deals.”
In October, Hana Al Rostamani, who was named the bank’s first female CEO in January, hailed its digital investments, new partnerships and international strategy.
Al Rostamani said the integration of its Egypt business (FAB bought the local unit of Lebanon-based Bank Audi in January) was “on track” for completion in 2022.
In November, the bank secured approval from China’s financial regulator to open a full-service branch in Shanghai; it is expected to be operational in the first quarter of 2022.
