FGB 2014 Net Profit at AED 5.66 Billion, up 18% from 2013

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FGB reports 15th consecutive year of Profit Growth

FGB reports a net profit of AED 5.66 Billion in 2014, up 18% compared to AED 4.77 Billion in 2013
FGB's Board of Directors recommends the distribution of 100% cash dividends and 15.38% bonus shares for 2014
Cash dividends represent 69% of full year net profits against 63% in 2013
Bank enjoys robust Capital Position with total CAR at 17.5% and Tier 1 Capital at 16.2% after dividend distribution
Earnings Per Share (EPS) up 22% to AED 1.42
Full year 2014 revenues at AED 9.24 Billion, 10% higher than in 2013; Non-Interest Revenues represent 30% of total revenues
Asset Quality: Ratio of Non-Performing Loans (NPL) to Gross Loans at 2.5% and NPL Provision Coverage at 126.7%; General Provisions in excess of AED 2.5 Billion
Total Assets at AED 212.2 Billion; Loans and Advances at AED 139.7 Billion and Customer Deposits at AED 141.3 Billion
Profitability: Return on Average Equity at 17.3% and Return on Average Assets at 2.8%
Other Key Ratios: Net Interest Margin at 3.6%, Cost to Income Ratio at 23.1%, Loan to Deposit Ratio at 98.9%

Abu Dhabi, January 28, 2015

FGB, one of the leading Banks in the UAE and the largest by market capitalisation continued to achieve record results where it reported a total net profit of AED 5.66 Billion in 2014. This represents an 18% increase when compared with AED 4.77 Billion achieved in 2013. 2014 marks the 15^th consecutive year of uninterrupted net profit growth for the Bank.

The Bank's solid performance is attributed to a continued focus on ensuring disciplined growth while leveraging the strengths of FGB's reshaped and enhanced business model. Positive growth momentum was witnessed across all lines of business due to ongoing diversification, continued cost control and a disciplined risk approach.

Abdulhamid Saeed, FGB's Managing Director and Board Member, said: "2014 marked our 35^th year of operation, and was a year of transformation as we made significant progress toward achieving our strategic ambitions. FGB's strong performance throughout last year is a clear testament of our unrelenting commitment to achieve superior financial results and consistently create more value for stakeholders and client groups. Despite rising market volatility caused by falling oil prices, FGB shares continued to outperform major indices and benchmarks thanks to investors' confidence in the FGB brand, story and strategy. We highly value our shareholders' confidence throughout the years and their trust in our vision."

FGB's Board of Directors recommended the distribution of a cash dividend of 100% (or AED 1 per share) and 15.38% bonus shares for the financial year ended 31 December 2014. This translates to total cash dividends of AED 3.9 Billion, against AED 3.0 Billion distributed in 2013. The dividend proposal is subject to the UAE Central Bank's approval, followed by the approval of the Ordinary General Assembly of Shareholders which will be held in Abu Dhabi on Wednesday 25^th February 2015.

André Sayegh, CEO of FGB, commented: "2014 was an important turnaround year for FGB as the Bank started reaping the benefits of its new business model in line with the strategy laid out almost two years ago. Much focus has been put into enhancing our product range, introducing greater specialisation across our core business segments, and implementing stronger cross-business synergies. These steps, in addition to our constant dedication to customer-centricity, are aimed at ensuring that FGB is the "First Choice" for customers, both in the UAE and abroad, and that we are the best partner to support them for all their financial needs. More importantly, our consistent focus on primarily maintaining a strong balance sheet and on mitigating risks through diversification have clearly paid off as is evident with stronger core performance metrics."

Q4/FY'2014 Summary Financials

2014 Performance

FGB recorded revenues of AED 9.24 Billion for 2014, an increase of 10% when compared with AED 8.42 Billion in 2013.

Net Interest and Islamic Financing income grew by 8% to AED 6.47 Billion. As expected, surplus liquidity in the UAE banking system and increasing competition put pressure on net interest margins (NIMs) throughout 2014. Nevertheless, NIMs only reduced by 10 basis points Year-on-Year to 3.6% as of December-end 2014.

The revenue diversification strategy and enhanced focus on fee-based business yielded positive results: non-Interest income recorded a solid growth of 14% Year-on-Year, driven by strong core fee and commission revenue streams and higher FX & derivative income. Consequently, non-Interest revenues increased their contribution to total revenues to 30% in 2014, up from 29% in 2013.

By business segment, the Wholesale & International Banking Group and the Consumer Banking Group each generated 38% of revenues, while the Treasury & Global Markets Group contributed 13%. The remaining 11% of revenues was provided by subsidiaries and associates.

Investing in the franchise is critical to ensuring that FGB lays strong foundations for continued future growth and success. In 2014, our cost-to-income ratio remained at a low 23.1% in spite of the expenses incurred due to the full consolidation of the Bank's new wholly owned subsidiaries "Dubai First" and "Aseel Finance", in addition to further investments in people and systems. FGB still displays a highly competitive cost-to-income ratio in comparison to regional and international peers and the Bank will continue to focus on maintaining a lean and efficient operating model.

Balance Sheet - Liquidity

Loans and Advances increased by 11% since December 2013 to AED 139.7 Billion in 2014. The successful reengineering of FGB's core business segments, combined with a favorable economic environment, were key drivers behind the positive commercial momentum experienced in 2014. Another achievement worth highlighting is the significant level of success achieved by FGB in the syndication business. In 2014, the Bank took the number one spot in the UAE Syndicated Loans League Tables (up from 10^th in 2013) and ranked 2^nd in the MENA Loan Mandated Arranger League Tables (up from the 34^th position last year).

Customer deposits were up 2% Year-on-Year to AED 141.3 Billion, leading to a Loan to Deposits Ratio of 98.9%, against 91.0% in 2013. Regulatory Advances to Stable Deposits Ratio remained at 83.5% well below the regulatory ceiling. Through consistent balance sheet management, FGB is already compliant with the Liquidity Coverage Ratio (LCR) requirement under Basel III liquidity rules.

FGB approached a wide range of funding sources through a number of issuances during the year including its debut 'Kangaroo' 5-year AUD 250 Million (AED 744 Million) bond in the Australian market, the issuance of a 10-year EUR 100Mn (AED 446 Million) EMTN, and the issuance of a 5-year JPY 10 Billion (AED 307 Million) bond as part of the USD 1 Billion program on the Tokyo Pro-Bond market. In the context of a comfortable liquidity position, FGB will proceed by end of January with the full pre-payment of a syndicated loan of USD 900 Million (AED 3,306 Million) maturing in December 2015.

Capitalisation and Earnings per Share

FGB's Total Shareholders' Equity amounted to AED 34.1 Billion as of December-end 2014, up 9% compared to the same period last year. The Bank's capital base remained robust with a Capital Adequacy Ratio of 17.5% and a Tier 1 capital of 16.2% after dividend distribution. Earnings per Share increased by 22% Year-on-Year to AED 1.42.

Asset Quality and Provisioning

Asset quality metrics continued to improve with the NPL ratio landing at 2.5% and notably improving from 3.3% last year. In parallel, NPL provision coverage was significantly enhanced to 126.7% following the consistent efforts of the Bank to reinforce its general provision buffer during the year. As a result, FGB general provisions of AED 2.50 Billion represent 1.6% of Credit Risk Weighed Assets as of December-end 2014 comfortably exceeding the 1.5% threshold imposed by the Central Bank. Full year loan provision charge amounted to AED 1.36 Billion, down 23% from AED 1.76 Billion in 2013.

Outlook

André Sayegh concluded: "2014 is already behind us and we are looking ahead with confidence and optimism. We strongly believe that the UAE economy is fundamentally solid enough to absorb the impacts of acute volatility in the commodities market, even in the case of a prolonged downturn. The competitiveness and strength of the UAE economy go far beyond the price of the barrel of oil. Ample reserves, a strong regulatory framework, and a robust and fast growing non-oil economy are here to support and reaffirm the UAE's position as an unrivaled economic hub in this region. The important milestones achieved in 2014, coupled with our medium term strategic roadmap, will help ensure that FGB's success story is a sustainable one as the Bank continues to turn challenges into opportunities in an ever-evolving operating environment."

-Ends-

About FGB
As a major leading Bank in the UAE, FGB had Shareholder Equity of AED 34.1 billion as of December 31^st, 2014 making it one of the largest equity based Banks in the UAE. Established in 1979 and headquartered in Abu Dhabi, UAE, the Bank offers a full range of financial services to business and consumer sectors throughout an extensive network of branches across the UAE. Internationally, FGB has branches in Singapore and Qatar, representative offices in India, Hong Kong, Seoul and London and a subsidiary in Libya.

Today, FGB is recognised as a world-class organisation committed to maximising value for shareholders, customers and employees as it focuses on delivering banking products and services that meet client needs and support the UAE's dynamic economy. In line with its commitment to excellence the Bank continues to invest significantly in people and technology to provide superior service standards. FGB was named the 'Best Bank in the United Arab Emirates' and 'Best Wealth Management Firm' at the Banker Middle East Industry Awards 2014. It was also ranked as the 8th most powerful company in the Arab World in Forbes' 'Top 500 companies in the Arab World' list. FGB was also recently recognised as an "Employer of Choice" at the GCC Best Employer Brand Awards 2014 and has been honored in the SME Banking Sector category of the inaugural Enterprise Agility Awards.

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