FAB expands its supply chain finance into Saudi Arabia FAB expands its supply chain finance into Saudi Arabia
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UAE’s FAB launches supply chain finance in Saudi Arabia

UAE’s FAB launches supply chain finance in Saudi Arabia

The programme allows companies to monetise their receivables at competitive rates and get instant payments, without needing to borrow funds

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FAB supply chain finance in KSA

UAE’s First Abu Dhabi Bank (FAB) is expanding its value-added trade product and channel capabilities in the region with the launch of its supply chain finance programme in Saudi Arabia.

The bank’s supply chain finance allows companies to monetise their receivables at competitive rates and get instant payments, without needing to borrow funds in a heightened interest rate environment.

Alfanar Construction already signed an agreement with FAB under the program, to become the bank’s first local client in the kingdom.

Earlier in 2021, FAB launched its fully automated solution in Egypt and has now expanded its trade product suite in Saudi Arabia by offering supply chain finance and receivables finance solutions.

“The launch of our Supply Chain Finance programme in Saudi Arabia is a significant step forward in our regional expansion strategy. Our state-of-the-art FABeSCF platform and fully automated solutions will provide our clients with a seamless and integrated experience that strengthens connectivity across the entire supply chain,” said Fahad Al Juwaidi, country CEO of FAB in Saudi Arabia.

FAB’s FABeSCF platform simplifies the end-to-end process, allowing corporates to receive funds in their bank account with just a few clicks.

The Abu Dhabi-based bank offers a seamless and unified experience to clients working across all major markets in the GCC region.

FAB’s Q1 2023 performance

Meanwhile, FAB reported a 70 per cent year-on-year (YoY) increase in first-quarter net profit driven by sustained momentum across all business segments and the bank’s ability to navigate evolving market conditions.

The bank’s net profit in the first quarter was $1.06bn (Dhs3.9bn), excluding the Dhs2.8bn from the sale of a stake in its payments business Magnati in the first quarter of 2022, translating to an annualised return on tangible equity (RoTE) of 18.5 per cent.

The banking group’s operating income jumped 51 per cent YoY to reach Dhs6.7bn compared to Dhs4.5bn in the first quarter of 2022, driven by strong growth in both net interest and non-interest income.

Impairment charges in Q1 2023 were at Dhs798m, up 74 per cent from a year earlier implying an annualised cost of risk of 62 basis points (bps).

FAB said its international operations remain a key contributor to the group’s liquidity with customer deposits soaring by 27 per cent or Dhs41bn in a single quarter. Similarly, revenues from international operations represent 23 per cent of FAB’s Q1 2023 group revenues.

The banking group’s total assets edged up 21 per cent YoY and 7 per cent sequentially to Dhs1.2tn sustained by sizeable deposit inflows deployed across loans and high-quality liquid assets.

Read: First Abu Dhabi Bank’s Q1 2023 net profit up 70%

Image credit: WAM

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