Ahli United Bank B.S.C. (AUB) reported a net profit attributable to its shareholders of US$ 262.5 million for the half year ended 30 June 2014. This reflected an increase of 38.1% over the core net profit of US$ 190.1 million achieved in H1/2013. The overall H1/2013 result of US$ 403.0 million included an exceptional non-recurring gain of US$ 212.9 million from the sale of its 29.4% stake in its Qatari affiliate.
The Q2/2014 net profit achieved was US$ 125.9 million, a 35.1% increase over the Q2/2013 quarter reported profit of US$ 93.2 million. The Basic Earnings per Share in H1/2014 were US 4.4 cents, compared to Basic Earnings per share of US 3.3 cents, adjusted for the exceptional gain in H1/2013.
The operating results of AUB were primarily driven by growth in its core operating earnings across its major markets. The main contributing factor was the improvement in the net interest margins achieved through a combination of prudent deployment of funds in risk assets and an effective strategy for the management of funding costs.
This resulted in a 13.7% increase in Net Interest Income from US$ 335.8 million to US$ 381.7 million. Diversified business flows and successful client acquisition initiatives contributed to a 11.7% growth in fee income from US$ 70.3 million to US$ 78.5 million. The YTD H1/2014 cost income ratio improved to 27.8% (YTD H1/2013: 30.3%) contributed by a surge in operating revenues and by the continued successful implementation of the AUB Group’s disciplined cost culture.
The Group’s total assets rose to US$ 33.9 billion (+ 3.7%) since 31 December 2013 driven by a US$ 1.3 billion (+7.6%) increase in the loan portfolio to reach US$ 18.6 billion by 30 June 2014. The growth in loan and advances was mainly funded by an increase in customers’ deposits to US$ 23.1 billion as at 30 June 2014 (31 December 2013: US$ 22.0 billion).
Asset quality showed improvement over year end 2013 with the non-performing loans ratio standing at 2.1% (31 December 2013: 2.3%) while the specific provision coverage ratio improved to 89.2% (31 December 2013: 86.1%).
The total provision coverage ratio, inclusive of collective impairment provisions, rose to 166.1% as at 30 June 2014 (31 December 2013: 155.5%).
The improved operating results positively impacted the AUB Group’s Return on Average Equity (ROAE) for H1/2014, increasing to 16.7%, compared to the operating ROAE of 14.0% achieved in the first half of 2013, excluding the exceptional gain. Return on Average Assets, calculated on the same basis, was significantly higher at 1.7% for H1/2014 (H1/2013: 1.4%).
“AUB’s focus on its major operating markets and its strong drive and commitment to expand its cross border business flows between these markets have been instrumental in achieving very strong growth in core operating revenues across its business lines” said Fahad Al-Rajaan, Chairman, AUB.
He added that “AUB is continuously investing in the future and is well positioned to reap the benefits of its large investments in training and technology to support new products and business initiatives which will be progressively rolled out in the coming period”.
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