In 2025, First Abu Dhabi Bank (FAB) reported profit before tax of AED 25.20 billion (about $6.9 billion), a 27% increase, while net profit reached AED 21.11 billion (about $5.7 billion). Operating earnings grew by 16% to AED 36.68 billion (about $10.0 billion). A key driver of this growth was non-interest income, which increased by 36% to AED 16.35 billion (about $4.5 billion), as fee-generating activities strengthened across the franchise. Foreign exchange (FX) and investment income increased by 40%, supported by client trading flows across FX, rates and commodities, while fees and commissions increased by 28%, driven by higher loan origination, trade finance and advisory services. Lars Kramer, group chief financial officer at FAB, attributed the outcome to the bank’s diversified revenue base and disciplined execution. “We delivered outstanding results in 2025, reflecting sustained revenue momentum, a diversified income mix and disciplined cost management, supported by strong client flows across our franchise,” he said. FAB continues to benefit from a balanced revenue profile combining lending growth with expanding markets and fee-based income streams. The bank’s fee-based businesses across loan origination, card services, cross-border trade finance, global markets and investment banking advisory have grown, raising non-interest income to about 45% of total revenue, up from roughly 25% around 2020-2021. Kramer said the bank has gradually increased the share of non-funded income to 45% of total revenues, following several structural initiatives implemented over recent years. He added that the bank will expand its asset management and wealth franchise to generate additional fee income. Revenue within the personal, business, wealth and privileged client banking division increased by 10% year-on-year (YoY) to AED 12.7 billion (about $3.5 billion), supported by investment activity. Retail assets under management (AUM) grew by 28%, as clients increased allocations to advisory and managed investment solutions. Net interest income increased by roughly 4% to AED 20.3 billion (about $5.5 billion) as loan volumes expanded across the balance sheet. Net interest margin (NIM) stood at 1.84% for the full year, declining slightly to 1.75%, in the fourth quarter, reflecting reduced interest recoveries. Kramer explained that NIM is expected to remain relatively resilient in 2026 despite potential interest-rate cuts. “For full year 2026, we expect NIM to remain relatively resilient, supported by disciplined balance sheet positioning in a lower interest rate environment,” he said. Meanwhile, net loans grew 17% YoY to AED 616 billion (about $168 billion), supported by credit demand from corporate and government-related entities, in infrastructure, trade and investment-related sectors. On the funding side, customer deposits increased by 7% YoY to AED 841 billion (about $229 billion), adding AED 58 billion (about $15.8 billion) during the year. Current and savings account (CASA) balances increased by 9% to AED 392 billion (about $107 billion), representing 47% of total customer deposits, reinforcing a relatively low-cost funding structure. Hana Al Rostamani, group chief executive officer, said the bank continues to benefit from strong client demand and growing cross-border financial activity. “A strong focus on client-centricity enabled us to deepen relationships across corporates, small and medium-sized enterprises (SME) and retail segments, converting advisory capability and corridor connectivity into new mandates and market share,” she said. She added that the bank’s expanding international network and integrated banking capabilities are creating new financing opportunities across global markets. Operating leverage and lower credit costs strengthen profitability Operating income increased 16% YoY, while operating expenses grew 5% to AED 8.2 billion (about $2.2 billion), reflecting continued investments in technology, data infrastructure and artificial intelligence (AI), which also improved the cost-to-income ratio (CIR) to 22.4% from 24.6% last year. Kramer noted that technology investments are enhancing productivity. “Operating efficiency remained robust, with revenue growth outpacing cost growth, as we continue to invest in technology and AI to enhance productivity and client experience,” he said. Credit performance also reinforced profitability. Impairment charges declined by 17% to AED 3.3 billion (about $0.9 billion), resulting in a cost of risk of 57 basis points, below earlier guidance of below 75 basis points. Asset quality improves and capital remains strong Total assets increased 16% YoY to AED 1.4 trillion (about $382 billion) in 2025, driven by lending across corporate, government-related and cross-border segments. The growth in assets was accompanied by improving credit quality, with the non-performing loan (NPL) ratio declining to 2.2% from 3.4%, and provision coverage at 108%. Capital levels remained solid, with a common equity tier 1 (CET1) ratio of 13.3%, above regulatory requirements. Strong earnings generation also translated into improved capital efficiency, with return on tangible equity (RoTE) reaching 19.2%, exceeding the bank’s medium-term guidance of more than 16%. A cash dividend of AED 0.80 ($0.22) per share, totaling AED 8.8 billion (about $2.4 billion) was declared. Cross-border banking anchors FAB’s international expansion strategy FAB operates in more than 20 markets, connecting the United Arab Emirates (UAE) with financial corridors across Asia, Europe, Africa and the United States (US). International activities accounted for 19% of group revenue, with the remaining 81% generated domestically. Cross-border financing and transaction activity contributed to revenue growth in 2025. Within the wholesale banking division, revenue increased by 11% YoY to AED 6.4 billion (about $1.7 billion), supported by corridor activity linking the Gulf Cooperation Council with the US and Asia. At the same time, investment banking and markets revenue grew by 16% to AED 11.8 billion (about $3.2 billion). Al Rostamani said cross-border connectivity is central to the bank’s strategy. “By expanding international corridors and strengthening FAB’s global franchise, we are building a scalable platform to support cross-border capital and investment flows” she said. She added that the bank’s international expansion combines domestic market strength with growing global connectivity. “We combine our deep roots in the UAE with expanding international reach to deliver integrated, end-to-end services across financing, advisory, markets and transaction banking,” she said. AI deployment reshaping operations while exploring tokenisation and digital finance In 2025, the group accelerated the deployment of AI across its core banking operations, moving beyond pilot projects toward enterprise-wide implementation across payments processing, trade operations and client advisory services. Al Rostamani said technology and AI have become embedded across risk management, compliance, treasury and client journeys, improving decision-making and operational efficiency. Kramer added that technology deployment is already generating measurable improvements in operational performance, productivity, decision accuracy and turnaround times. Supporting this transition, FAB increased investment in digital infrastructure, data platforms and specialised AI talent. As a result, operating expenses increased by 5% YoY to AED 8.2 billion (about $2.2 billion). Across the organisation, more than 1,000 AI Copilot agents have been deployed, and over 30 AI-driven solutions —covering areas such as trade operations, payments processing and workflow automation—are in development. A centralised AI innovation hub has been established to scale these capabilities across the bank’s global network. The bank is also exploring emerging technologies such as tokenisation and stablecoins for capital markets and cross-border payments. FAB has taken steps toward digital asset innovation, including the issuance of Middle East and North Africa (MENA)’s first blockchain-based digital bond valued at $100 million. 2026 outlook focused on lending growth and capital strength As the bank pivots toward a more diversified and internationally connected business model, FAB has outlined a strategy for 2026 focused on balance-sheet growth, disciplined risk management and sustained profitability. Kramer also noted that risk metrics are expected to remain stable as the bank expands its lending activities. “On asset quality, we expect cost of risk below 70 basis points, with provision coverage above 90%, reflecting our prudent risk approach,” he added. For 2026, loan growth is expected in the low-to-mid teens, supported by favourable UAE economic conditions and continued expansion across client franchises, underpinned by higher projected gross domestic product (GDP) growth, rising company formations and ongoing population growth. Kramer said these trends are likely to support lending demand across multiple business segments. FAB reiterated its medium-term profitability objective of RoTE above 16% and CET1 above 13.5%, to ensure sufficient capital buffers to support future growth.
