Amidst the current very challenging and difficult business environment, Ahli United Bank B.S.C. (AUB) has maintained its usual prudent and conservative approach to risk taking together with an even more focused risk management strategy within the existing business model. This led to AUB reporting a net profit, attributable to its equity shareholders, of $85.9 million for the first quarter of 2009, (Q1/2008: $94.3 million).
The results show a rise of 10.7 percent in total operating income to a record quarterly level of $212.6 million while operating costs declined by 11.8 percent during the quarter. Overall, the reported net profit includes a net provisions charge of $47.0 million (Q/1-08: $10.1 million) with the increase mainly as a result of AUB prudently raising additional collective impairment provisions of $39.0 million relating to its loans and advances portfolio.
The cost to income ratio improved significantly to 28.4 percent as a result of the surge in operating income (Q/1-08: 35.7 percent) besides, the Group's Return on Average Equity improving to 17.1 percent as compared to 16.8 percent earned in the first quarter of 2008. The Return on Average Assets for the Group stood at 1.7 percent. The resultant basic and diluted earnings per share stood at US cents 1.8 for the current quarter ended 31 March 2009 (US cents 2.0 for the quarter ended 31 March 2008).
The Group's total assets at 31 March 2009 stood at $24.0 billion, a marginal increase of 1.7 percent over $23.6 billion reported as at 31 December 2008. Loans and advances portfolio, as a result of the prudent and conservative risk stance adopted under the current uncertain market conditions declined marginally by 1.5 percent to $13.4 billion(31December 2008: $13.6 billion) with the continuing enhanced focus on the funding profile resulting in the growth in customers' deposits by $1.0 billion (+6.8 percent) since the 2008 year-end.
"It is indeed encouraging to start a very challenging year on a satisfactory note under the current challenging operating environment. We are particularly satisfied with the growth in operating income, the deepening of funding sources and the excellent management of costs across all business lines." said Fahad Al-Rajaan, Chairman of Ahli United Bank.
"Our prudent and disciplined approach towards risk taking maintained asset quality at very high levels with the non-performing loans ratio managed to under 2 percent of the total loans and advances portfolio", added Mr. Al-Rajaan.
"AUB's performance continued to be recognised by the international financial industry. Recently the Bank was named the 'Best Bank in the Middle East 2009' by Global Finance, the fourth consecutive year AUB has received this prestigious accolade," Mr. Al-Rajaan concluded.
Ahli United Bank BSC is an offshore and full commercial banking institution based in Bahrain providing retail, commercial and investment banking business, global fund management and private banking services. It is geared towards growth through the development of a larger client base in the Gulf states and through its close partnerships with customers staff and product providers. The evolution of future mergers and acquisitions in the Gulf region remains central to the Bank's expansion strategy. For 2008, AUB reported a consolidated net profit of $255.7 million. Total assets stood at $23.6 billion as of Dec 31, 2008.
AUB has an effective holding of 75 percent share in the Bank of Kuwait and the Middle East (BKME). BKME has a 10 percent market share in Kuwait. BKME achieved a net profit of KD 51.4 million for the year ended 31 December 2008, an increase of 6.6 percent over the previous year.
AUB also has a 38 percent share in Ahli Bank QSC a commercial bank in Qatar with an enhanced capital base following the 100 percent participation by AUB in its capital increase. Ahli Bank QSC achieved a 40.7 percent percent higher net profit of QR 425.8 million for the year ended 31 December 2008 compared to 2007. AUB has a 10-year management contract with Ahli Bank QSC.
Ahli United Bank has a 50 percent share in the Commercial Bank of Iraq, a private commercial banking institution established in Iraq in 1992. Since its inception, Commercial Bank of Iraq has performed consistently well in different business segments and its total assets as at 31 December 2007 stood at IQD 213 billion.
Ahli United Bank, its associate banks and other Gulf financial institutions together acquired an 89.3 percent in Ahli United Bank (Egypt) SAE (AUBE), (formerly Delta International Bank SAE (DIB)), in August 2006. Established in 1978, AUBE is a commercial bank offering retail banking, corporate banking, private banking, project and trade finance, and treasury services through 24 branches across Egypt.
© Arab Times 2009
