FGB stock climbs on bigger dividend pledge

Shares of FGB rallied on Monday after the Abu Dhabi-based lender said it would increase its annual dividend by 15 per cent from last year’s payout. FGB rose 3.1 per cent on Monday to Dh11.7, bringing its two-day gain to 15 per cent after the lender said on Sunday that it planned to distribute Dh1 […]

Shares of FGB rallied on Monday after the Abu Dhabi-based lender said it would increase its annual dividend by 15 per cent from last year’s payout.

FGB rose 3.1 per cent on Monday to Dh11.7, bringing its two-day gain to 15 per cent after the lender said on Sunday that it planned to distribute Dh1 per share to investors on 2015 profit, versus Dh0.86667 in 2014, Bloomberg data shows.

FGB said on Sunday that its net income in the fourth quarter gained 11 per cent to Dh1.71 billion versus Dh1.55bn in the same period the previous year, boosted by a revaluation of investment properties that it did not specify.

The gain in fourth-quarter income came even as money set aside for bad debt rose, while loans and advances fell and income from fees declined. Net other operating income jumped 158 per cent to Dh681 million in the fourth quarter year-on-year after the real estate revaluation.

For the full year, the bank’s earnings rose 6 per cent to Dh6bn in 2015, joining many of the other big banks in the UAE in posting higher overall growth last year. However, the strain on the banking industry that is beginning to emerge from the fourth-quarter earnings suggests more pain on the way, especially if the drop in the oil price – which has lost more than 70 per cent of its value – does not abate, analysts said.

“Although global economic conditions appear to be challenging in 2016, it is a market reality that the UAE has always overcome downturns, and re-emerged with a stronger mom­entum,” said Andre Sayegh, the chief executive of FGB.

“A key factor behind the UAE’s resilience is its strong competitiveness and the unique advan­tages it offers as a business en­vironment, including state-of-the-art infrastructure, an environment of low taxation, a strong regulatory framework and a strategic geographical location within the reach of billions of consumers.”

mkassem@thenational.ae

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Source: Business

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