Ahli United Bank reports $115.9mln net profit

MANAMA: Ahli United Bank (AUB) has reported a net profit of $115.9 million for Q3-2020, which represents a 35.9 per cent decrease over the Q3-2019 profit of $180.9m.

For the first nine months of 2020 (YTD), net profit was $409.3m, a decrease of 26.7pc as compared with $558.4m achieved in YTD 2019.

Basic and diluted earnings per share in Q3-2020 were 1.2 cents compared with 1.9 cents in Q3-2019 and 4.1 cents for YTD as compared to 5.6 cents in YTD 2019. Comprehensive income for Q3-2020 was $129.7m compared to $179.8m in Q3-2019 and for YTD 2020 was $287.1m as compared to $577.8m for YTD Q3-2019 due to unrealised financial adjustments related to temporary market fluctuations.

While Q3-2020 saw a gradual lifting of Covid-19 linked lockdowns by various countries followed by scattered signs of modest recovery, business sentiment continued to remain subdued affecting lending and liquidity opportunities which were further impacted by the continuing effect of lower oil revenues.

As a result, net interest income (NII) reduced by 16.9pc to $193.2m in Q3-2020 (Q3-2019: $232.5m) and reduced by 17pc to $599.9m for YTD 2020 (YTD 2019: $722.7m).

Lower NII and fees and commission income resulted in lower operating income of $247.4m during Q3-2020 as compared to $289.2m in Q3-2019 whereas for the first nine months of 2020, operating income was $823m as compared to $919.3m in YTD 2019.

The cost to income ratio stood at 28.6pc (YTD Q3-2019: 26.7pc) reflecting AUB’s disciplined cost management culture.

AUB reported a non-performing loans ratio of 2.5pc (end-2019: 1.9pc) with specific provision coverage of 77.7pc (end-2019: 85.9pc).

Total provision charges (net) were increased on a prudential and proactive basis to $35.2m for Q3-2020 (Q3-2019: $4.9m) and $117.6m for YTD Q3-2020 (YTD Q3-2019: $39.2m). Provision coverage levels are calculated on a cash provision basis excluding the value of the significant additional non-cash (real estate and securities) collaterals available against non-performing loans.

The AUB Group’s total assets at end-September 2020 marginally increased (+1pc) to $40.7bn (end-2019: $40.3bn).

Return on Average Assets was at 1.4pc for YTD Q3-2020 (YTD Q3-2019: 2.2pc).

The group’s equity as of end-September 2020 decreased by 6.5pc to $4bn (end-2019: $4.3bn). Return on Average Equity for YTD 2020 was 12.7pc (YTD 2019: 18.1pc).

AUB chairman Meshal Al Othman said, “Global and regional economies were deeply impacted by the Covid-19 outbreak and the resultant extended lockdowns. The GCC economies were further hit by the continuing weakness in energy prices seriously limiting their budgetary spend and affecting business confidence.”

He added, “AUB will continue to conservatively navigate this challenging and unprecedented environment by providing a safe operating environment for all staff, clients and counterparties, building a seamless remote capability to transact business and support all our client needs until business as usual conditions can be restored.”

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