First Abu Dhabi Bank: net profit grows, but pace slows to 3.8%

On August 25, First Abu Dhabi Bank reported results for the second quarter of 2026. Net profit reached AED 5,715 million, up 3.8% year-on-year, while net interest income grew 5.4% to AED 9,218 million. The shares look attractive: at a P/E of 10.1 and ROE of 16.1%, the portal sees upside potential of +11%.

Key takeaways

— Net interest income in Q2 2026 grew 5.4% year-on-year to AED 9,218 million

— Net profit for the quarter rose 3.8% year-on-year to AED 5,715 million, but the pace slowed compared to previous quarters

— Over the last twelve months, net profit reached AED 21,204 million, and net interest income – AED 34,000 million

— Return on equity (ROE) stands at 16.1%, supporting the share valuation

— According to the portal's model, the upside potential of the shares is estimated at +11% from the current price

— The bank maintains high efficiency: P/E of 10.1 is below its three-year average

Attractiveness

Key figures, AED bn

Net interest income in Q2 2026 grew 5.4% year-on-year to AED 9,218 million

In Q2 2026, First Abu Dhabi Bank's net interest income reached AED 9,218 million, up 5.4% year-on-year. This continues the growth trend, albeit slower than in previous quarters: Q1 2026 saw only 1.8% growth, while Q2 2025 saw 27.5%.

The slowdown in interest income growth may reflect normalisation of interest rates and competitive pressure on margins. Nevertheless, the absolute level of income remains high, supporting the bank's profitability.

Net profit for the quarter rose 3.8% year-on-year to AED 5,715 million, but the pace slowed compared to previous quarters

Net profit in Q2 2026 reached AED 5,715 million, up 3.8% year-on-year. This is a noticeable slowdown compared to previous quarters: Q1 2026 saw 1.8% growth, while Q2 2025 saw 27.5%.

The slowdown in profit growth may be due to higher operating expenses or provisions, but the bank maintains high profitability. Over the last twelve months, net profit reached AED 21,204 million, confirming the business's resilience.

Over the last twelve months, net profit reached AED 21,204 million, and net interest income – AED 34,000 million

Over the last twelve months (LTM), First Abu Dhabi Bank's net profit reached AED 21,204 million, and net interest income – AED 34,000 million. These figures reflect the scale of the business and its ability to generate stable income.

LTM figures are the sum of the last four quarters and are not tied to the reported period's growth rates. They serve as the basis for valuation multiples: at the current market capitalisation of AED 214,986 million, the LTM P/E stands at 10.1.

Return on equity (ROE) stands at 16.1%, supporting the share valuation

First Abu Dhabi Bank's return on equity stands at 16.1%. This is a high figure for the banking sector, indicating efficient use of capital and sustainable profit generation.

High ROE combined with a moderate P/E (10.1) suggests that the shares are undervalued relative to the bank's ability to create value. This is a key argument for the attractiveness of the stock.

According to the portal's model, the upside potential of the shares is estimated at +11% from the current price

Based on our model, which compares annualised earnings to market capitalisation, the fair value of First Abu Dhabi Bank's shares is 11% above the current price. This implies that, given current financials, the shares have upside potential.

The portal's model incorporates ROE and P/B, allowing an assessment of how fairly the market values the bank. The current discount to fair value makes the shares attractive for long-term investors.

The bank maintains high efficiency: P/E of 10.1 is below its three-year average

First Abu Dhabi Bank's current P/E stands at 10.1, below its three-year average. This indicates that the shares are trading at a discount to their historical valuation, which could be an attractive entry point.

The low multiple, combined with ROE of 16.1% and upside potential of +11% per the portal's model, creates a compelling investment case. The main risk remains the slowdown in interest income growth, which may continue.

Valuation on the latest reported figures

Bottom line

First Abu Dhabi Bank demonstrates steady growth, but the pace is slowing: net profit in Q2 rose only 3.8%, and net interest income – 5.4%. Nevertheless, over the last twelve months, the bank earned AED 21,204 million in net profit, confirming its ability to generate high income. With a P/E of 10.1 and ROE of 16.1%, the shares look undervalued, and the portal's model indicates upside potential of +11%. The key question for holders is whether the bank can accelerate interest income growth or whether the slowdown becomes a sustained trend.