First Gulf Bank misses Q1 forecast on year-ago gain

First Gulf Bank misses Q1 forecast on year-ago gain

First Gulf Bank profit down 4.8 pct over last year; Provisions down 7 pct in the quarter

April 25, 2011 3:36 by Reuters

First Gulf Bank (FGB) reported a 4.8 percent decline in quarterly profit on Monday, missing estimates, as the lender’s 2010 results were buoyed by a one-time gain.

FGB, the United Arab Emirates’ second largest lender by market value, said it had first quarter net profit of 875 million dirhams ($238.2 million). Profit stood at 919.73 million dirhams in the prior-year period, according to Reuters data.

Analysts had forecast average profit of 929.44 million dirhams in a Reuters poll.
First quarter profit in 2010 included 179 million dirhams from the sale of real estate, the lender said, adding this year’s first quarter profits rose 1.2 percent over the fourth quarter.

Core banking revenues, which excludes income from subsidiaries and associate firms, rose to 1.58 billion dirhams in the quarter, up 8 percent. Total net interest and Islamic financing income was up 10 percent to 1.14 billion dirhams.

“We have posted significant gains represented by 8 percent jump in revenue over the first quarter of 2010 in our core banking portfolio,” Andre Sayegh, FGB’s chief executive, said in a statement. “We are focusing on growing our core business as we are well positioned to increase lending to the targeted sectors in the coming quarters of 2011 and beyond,” he said in the statement.
FGB booked provisions totaling 459 million dirhams in the quarter, down 7 percent from last year. Loans grew 4.1 percent to 97.1 million dirhams while deposits jumped 10.1 percent to 98.5 million dirhams in the first quarter.
FGB shares closed down 2.2 percent on Monday on the Abu Dhabi index, which was down 0.8 percent. The bank issued its results after the market closed.
(Reporting by Stanley Carvalho; Editing by Amran Abocar)