CHAIRMAN’S STATEMENT
Group financial performance in 2020
I summarize below the key financial outcomes of our actions for the year ended 31 December 2020:
• FH Group has posted a Consolidated Net Profit of AED 20.90 million for the financial year ended 31 December 2020, compared to AED 22.45 million registered in the previous financial year ended 31 December 2019.
• Our insurance subsidiary- Insurance House PSC chipped in with a resilient performance, despite the headwinds, with Net Insurance Income of AED 42.53 million in 2020 compared to AED 45.59 million in the previous year.
• Aggregated income from group-wide investing activities & other operating income (of a recurring nature) was substantially higher at AED 53.84 million in 2020 compared to AED 35.31 million in the previous year, primarily due to pro-active management of our proprietary investment book, in spite of volatile market conditions.
• Net Interest Income and Income from Islamic Financing & Investing Assets were lower at AED 153.46 million in 2020 compared to AED 174.34 million in the previous year. This is mainly due to a very cautious approach in onboarding new risk assets, under foggy economic conditions as a result of the pandemic.
• Net Fee and Commission income earned in 2020 was also lower at AED 25.66 million compared to AED 43.05 million in the previous year.
• Net Operating Income for 2020 was lower at AED 201.39 million compared to AED 227.82 million in the previous year.
• Net Loans & Advances including Islamic Financing & Investing Assets as of 31 December 2020 stood at AED 2.23 billion compared to AED 2.54 billion as at the end of the previous year.
• Customers’ Deposits & Margin Accounts as of 31 December 2020 stood at AED 1.92 billion compared to AED 2.47 billion as at the end of the previous year.
• Our loan loss provisioning policy continues to be prudent. In line with the expected credit loss model (ECL) for loan impairment provisioning under IFRS 9, net impairment charge for the year 2020 was higher at AED 74.10 million compared to AED 70.46 million in the previous year.
• Total Operating Expenses for 2020 at the Group level were significantly lower by circa 12% at AED 180.19 million compared to AED 205.01 million in the previous year.
• Net cash and cash equivalents as at 31 December 2020 stood at AED 446.61 million, representing a healthy 13.1% of Total Assets.
• At the consolidated level, Shareholders’ equity as at 31 December 2020 stood AED 769.74 million and the Total Assets ratio at a robust 26.6%, providing a solid footing for sustained future growth in assets.
