Net profit up 21% Q-o-Q, beat estimates. FGB reported net profit of AED1,719 million, +21.1% Q-o-Q and +10.8% Y-o-Y. The bank’s earnings came in above our estimate of AED1,546 million (Bloomberg consensus of AED1,418 million) mainly due to stronger than expected net interest income and higher-than-expected gains on real estate. Management proposed a cash dividend of AED1.0/share (pay-out c75%) compared to AED0.87/share for 2014, and higher than our expectation of AED0.90/share.   Our view: A mixed set of results. While overall revenue growth was strong (+22.8% Q-o-Q and +18.3% Y-o-Y), stripping out the real estate gain FGB’s revenue growth was relatively subdued (1.5% Q-o-Q and 3.1% Y-o-Y). In 2016 management expects flat to low single-digit revenue growth versus 5.0% in 2015. Provisioning surprised negatively – cost of risk rose to 120bps from 80bps in 3Q2015 – as the NPL ratio rose 10bps Q-o-Q to 2.8%. FGB stated that there was a settlement of a large corporate account, however this was offset by the downgrade of a large international exposure. The bank’s NPL coverage decreased to 103% from 110% in 3Q15. FGB ran down its loan book (-2.8% Q-o-Q) to cope with tightening liquidity, which helped improve the LDR to 105% from 109% in 3Q15. FGB’s spreads improved 8bps Q-o-Q to 3.04%, likely on reversal of suspended interest. We have a favorable view on FGB as we believe that it has sufficient risk absorption capacity – CAR of 17.5%, 2016e pre-provision ROA of c2.5% - and a proven track record of coping with macro risks. The bank trades at a 2015e P/BV of c1.8x. We have a Buy rating on FGB.   Main positives: i) wider spreads (+8bps Q-o-Q to 3.04%); and ii) improved liquidity (LDR decreased to 105% from 109% in 3Q2015). Main negatives: i) Higher-than-expected provisioning (cost of risk rose to 121bps from 80bps in 3Q2015); and ii) contraction in loan book (-2.8% Q-o-Q)