Group financial performance in 2018
I summarize below the key financial outcomes of our actions for the year ended 31 December 2018:
- FH Group posted a Consolidated Net Profit of AED 17.84 million compared to AED 32.61 million in the previous year.
- Net Interest Income, Income from Islamic Financing & Investing Assets and Net Income from Perpetual Instruments were marginally lower at AED 194.95 million in 2018 compared to AED 196.64 million in the previous year. This is mainly due to increased cost of funding that was not entirely passed on to our corporate customers.
- Net Fee and Commission income was marginally lower at AED 46.75 million compared to AED 47.48 million in the previous year. Poor trading volumes in domestic equity markets during 2018 translated to significantly lower brokerage fees at our local stock broking subsidiary.
- Net Insurance Income catapulted to AED 38.77 million in 2018 compared to AED 12.68 million in the previous year, aided by the sustained turnaround in the core operations of our insurance subsidiary.
- Aggregate investment & other operating income was substantially lower at AED 19.32 million in 2018 compared to AED 42.77 million in the previous year primarily on account of the disappointing performance of domestic equity markets in 2018 and consequential marked to market losses of circa AED 31.50 million from our domestic equities trading portfolio.
- Net Loans & Advances including Islamic Financing & Investing Assets were also marginally lower at AED 2.44 billion compared to AED 2.51 billion as at the end of the previous year.
- Customers’ Deposits & Margin Accounts stood at AED 2.75 billion translating into a healthy Loans to Deposits ratio of 88.9% as of 31 December 2018.
- General and Administrative expenses increased by AED 6.33 million to AED 57.46 million compared to AED 51.12 million in the previous year. Bulk of this increase ie. AED 5.70 million out of AED 6.33 million is on account of input VAT that is not recoverable from customers pursuant to the Federal VAT Law that came into force with effect from 1 Jan 2018.
- Net cash and cash equivalents as at 31 December 2018 stood at AED 509.15 million, representing a healthy 12.43% of Total Assets.
- Capital adequacy ratio at the consolidated level as of 31 December 2018 stood at a robust 20.3%, providing a solid footing for sustained future growth in assets.