Ahli United Bank B.S.C. (AUB) reported a net profit attributable to its equity shareholders of $136.6 million for the quarter ended 31 March 2014. The Q1/2013 results of $309.8 million included an exceptional non-recurring gain of $212.9 million on the sale of its 29.4% stake in its Qatari affiliate.
Excluding this item, the net profit reflected a surge of 41.0% in Q1/2014 compared to the $96.9 million in Q1/2013. The Q1/2014 net profit also represents a 76.9% improvement over the Q4/2013 trailing quarter reported profit of $77.2 million. The Basic Earnings per Share in Q1/2014 was US 2.3 cents, compared to US 1.7 cents, adjusted for the exceptional gain, in Q1/2013.
The operating results of AUB were driven primarily by growth in its core recurring earnings which was underpinned by the improvement in its net interest margins through selective deployment of funds in high yielding assets combined with effective funding cost management.
This resulted in a 13.2% increase in Net Interest Income from $167.4 million to $189.5 million. Diversified business flows contributed to a 21.3% growth in fee income from $32.3 million to $39.2 million. With incremental operating revenues and continuing disciplined cost management, the cost income ratio improved to a very satisfactory 26.5% level (YTD Q1 / 2013: 29.9%).
The Group’s total assets rose to $33.6 billion (+ 3.0%) since 31 December 2013 driven by a $0.5 billion (+2.9%) increase in the loan portfolio reflecting improving operating conditions to reach $17.8 billion by 31 March 2014. Customers’ deposits increased to $22.8 billion as at 31 March 2014 (31 December 2013: $22.0 billion). Asset quality levels were sustained with the non-performing loans ratio at 2.5% (31 December 2013: 2.6%) while the specific provision coverage ratio improved to 89.7% (31 December 2013: 87.6%). The total provision coverage ratio, inclusive of collective impairment provisions, rose to 152% as at 31 March 2014 (31 December 2013: 149%).
The Group’s Return on Average Equity (ROAE) for Q1/2014, increased to 17.2%, compared to the operating ROAE of 14.1% achieved in the first quarter of 2013, excluding the exceptional gain. Return on Average Assets, on the same basis, was higher at 1.9% for Q1/2014 (Q1/2013: 1.4%).
“AUB continued its strong performance in Q1/2014 through focused attention on developing and diversifying core operating income growth. On an ongoing basis, the Bank seeks to expand its banking franchise further through value accretive organic or inorganic means, where feasible, which underpins its business model. This entails continuous focus on the effective deployment of its capital resources across the group’s operating and targeted markets.” said Fahad Al-Rajaan, Chairman, AUB.