The top five: The major banks have all been strong performers

First Gulg Bank (FGB)

With assets of Dh182.9bn ($49.7bn) at the close of the first half of 2013, FGB is the third-largest bank in Abu Dhabi and the largest privately owned lender. Established in 1978, the historically retail-focused lender had developed a universal set of services, encompassing the core revenue drivers of wholesale and consumer banking, as well as the incremental revenue streams derived from treasury and global markets and a range of subsidiaries and associate companies. The latter include a number of regional banking, asset management and real estate interests, including First Gulf Libyan Bank, First Gulf Properties, Aseel Finance, Dubai First, Mismak Properties, First Merchant International and Radman Properties. The bank also offers sharia-compliant products through its Islamic window, Siraj. Although its sovereign links are more limited than some of its competitors, the sizeable stake in it held by Abu Dhabi’s ruling family (65%) and its emergence from the global economic crisis with improved capitalisation levels have helped it retain a long-term rating of “A2” from Moody’s, “A+” from Fitch and “A+” from Capital Intelligence.

In 2012 the bank posted a y-o-y rise of around 13.5% to reach Dh4.17bn ($1.14bn) in revenue, a result that was underwritten by the highest revenues that it has ever achieved in one quarter (in the fourth quarter).

FGB further strengthened its funding resources over the year with the issuances of a $500m sukuk, or sharia-compliant bond; a $650m, five-year conventional bond; and a $900m, three-year syndicated loan.

The bank intends to use its new funds to finance the expansion of existing operations as well as pursue international business opportunities. The latter promises to substantially alter the structure of the bank’s revenue, which is currently 96% sourced from its activities within the UAE. In 2013, its profitable streak continued, with a net profit for the first half of the year of Dh2.2bn ($598m) representing a y-o-y rise of around 13%.

Abu Dhabi Commercial Bank (ADCB)

 ADCB is the fourth-largest bank in the UAE and the third largest in Five institutions dominate the banking sector, and all have put in strong performances over the past year.

National Bank Of Abu Dhabi (NBAD)

With total assets of Dh327bn ($89bn) as of June 30, 2013, NBAD is the second-largest bank in the country and the largest of the Abu Dhabi-based lenders. Majority-owned (70%) by one of Abu Dhabi’s sovereign wealth funds, the Abu Dhabi Investment Council (ADIC), its status as a quasi-government firm places it at the centre of the emirate’s economic development, and has enabled it to grow the largest lending book of all Abu Dhabi’s banks – Dh173bn ($47bn) at the close of the first half of 2013, according to its interim financial report. The sizeable government interest in the bank has also helped it maintain one of the strongest credit profiles regionally and globally, with long-term credit ratings of “Aa3” from Moody’s, “AA-” from Standard & Poor’s , “AA-” from Fitch and “AAA” from RAM of Malaysia – all with stable outlooks. As a universal bank it has adopted a diversified business model, covering retail and commercial banking, corporate banking, global financial markets and wealth management, with operations across an international network spanning nine Arab countries (30 branches in Egypt alone) and further branches or representative offices in the UK, France, US, Hong Kong, China, Malaysia and Brazil. Its expansion plan for 2014 includes moves into Singapore and India.

The bank has demonstrated consistent, prudent growth in recent years, with assets rising at a compound annual growth rate (CAGR) of 23% between 2004 and 2012 and customer deposits increasing by a CAGR of 22%, while customer loans expanded at a CAGR of 21%. Net profits rose at a CAGR of 19% between 2000 and 2012, to reach Dh4.3bn ($1.2bn). This positive trend has also been carried into 2013, with net earnings of Dh2.6bn ($707m) for the first half representing a year-on-year (y-o-y) rise of 25.6%. The bank attributes the recent uptick to a growth in fee and net interest income, buoyed by a strong showing on the investment and hedging activity side. Abu Dhabi, with total assets of Dh175bn ($47.6bn) at the close of the first half of 2013, according to its interim financial statement. Like NBAD, the bank is linked to the state by the sizeable interest ADIC holds in it. This advantage is reflected in its historical weighting towards wholesale business and a robust credit profile: a long-term rating of “A” from Standard & Poor’s, “A+” from Fitch and “AAA” from RAM.

In recent years the bank has broadened its range of activities beyond its corporate base, and has established itself as a strong retail player in the domestic market, with more than 50 branches across the UAE. As part of this effort, it has invested heavily in alternative channels, such as online banking, and deployed retail-centric corporate imaging, like its “Long Live Ambition” and “Money Can’t Buy Ambition” campaigns.

The bank’s expansion strategy has been largely focused on organic growth within the UAE, which has included the establishment of a sharia-compliant component, ADCB Islamic Banking, but it has also made significant investments beyond the nation’s borders. It was an early mover into the Indian market, establishing a branch in Mumbai in 1980 and Bangalore in 1996. In 2008 it acquired a 25% stake in the Malaysian bank RHBC, aimed at leveraging on the growing cross-border banking activities between Asia and the GCC, which it sold in 2011. For 2012, ADCB reported a net profit of Dh2.8bn ($762m), down around 6.6% from Dh3bn ($816m) in 2011. However, the 2011 results were significantly buoyed by the RHBC sale, and in the first half of 2013 net profit returned to the growth trend that the bank is more accustomed to: for the six months ending June 30 it was up 17% y-o-y to reach Dh1.8bn ($490m), driven by a rise in net interest income of 4% and non-interest income growth of 31%.

Union National Bank (UNB)

Abu Dhabi’s fourth-largest lender posted total assets of Dh80.1bn ($21.8bn) at the end of the first half of 2013. The bank’s ownership structure is unique in the local market in that it is the only bank in the UAE to be jointly owned by the governments of Abu Dhabi and Dubai. The bank offers commercial and investment banking products and services both conventional and sharia-compliant Islamic financing through its network of 66 branches in the UAE, Qatar, Kuwait and the Qatar Financial Centre. UNB was the first Emirati bank to enter the Chinese market and has a representative office in Shanghai. UNB has a presence in Egypt, through the acquisition of the Alexandria Commercial and Maritime Bank (now Union National Bank Egypt), with 32 branches. The UNB Group also includes one of the oldest brokerage firms in the UAE, Union Brokerage Company, while its subsidiary Al Wifaq Finance Company offers sharia-compliant Islamic financial, commercial and investing services.

The bank has put in a strong performance over recent years, retaining its ratings of “A1” from Moody’s and “A+” from Fitch throughout the turbulence of the global credit crisis and to the present day. In 2012 it posted a profit of Dh1.6bn ($435m), a y-o-y rise of around 6.6%, which the bank attributed to higher-than-average net interest income and a significant rise in non-interest income driven by dealing in foreign currencies and non-trading financial instruments. The performance gains were carried over into the following year, with net profit for the first half of 2013 climbing to Dh987m ($268.7m), a 5.7% increase on the Dh934m ($254.2m) recorded during the previous year.

Abu Dhabi Islamic Bank (ADIB) 

 ADIB is the largest sharia-compliant bank headquartered in the capital, and the second largest in the UAE. Commencing operations in 1998, the bank is linked to the ruling family through a 40.6% stake held by the Emirates International Investment Company (EIIC), a private holding company, and a number of smaller stakes maintained by royal family members and associates. EIIC remains actively involved with the bank’s management, while more quasi-sovereign backing comes from stakes held by the UAE General Pension and Social Security Authority (2%) and ADIC (7.6%).

In 2008 the arrival of a new management team at the bank resulted in the implementation of a growth strategy built around three pillars: establishing itself as a market leader in the UAE by developing its private banking, personal banking, business banking and wholesale banking components; creating an integrated financial services group and capitalising on the synergies to be found within its diversified offerings; and pursuing growth opportunities outside its home market. With regard to the latter ambition, recent years have seen the bank make a significant move into Egypt through the purchase of a 49% stake in the National Bank for Development, which it has followed up with the opening of branches in Iraq, Sudan, the UK and Qatar.

The bank has enjoyed sustained profitability since its 2008 management overhaul, with its net profits rising by a CAGR of 9% over the period to 2012. In the first half of 2013 revenues grew by a further 6% to reach Dh1.87bn ($509m) which, after the deduction of expenses and provision for impairment, resulted in an operating profit for the first half of the year of approximately Dh711.4m ($193.6m), a y-o-y rise of 13%.