Ahli United Bank reports a net profit of US$ 482.5 million and operating income crosses US$ 1 billion
Ahli United Bank B.S.C. (AUB) reported a record net profit attributable to its equity shareholders of US$ 482.5 million for the year 2014, a growth of 31.7% compared with the net profit of US$ 366.5 million in 2013. The overall 2013 net profit of US$ 579.4 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 net profit in Q4/2014 was US$ 106.2 million as compared to US$ 77.2 million in Q4/2013.
AUB’s total operating income crossed US$ 1 billion for the first time since its inception in 2000 with an increase of 8.7% over the US$ 958 million achieved in 2013. This surge in operating income was driven largely by a 7.0% rise in net interest income (NII) to US$ 763.3 million. The NII increase was achieved primarily through higher lending volumes as well as prudent deployment of liquidity in non-trading investments within a risk acceptable framework complemented by focused liability cost management. Fees and other income increased by 13.4% from US$ 245.1 million to US$ 278.0 million. The higher operating income and disciplined cost culture aligned to business needs across the AUB Group further improved the operating cost income ratio to 29.7% (2013: 30.0%).
The Group’s total assets grew by 2.4% to reach US$ 33.4 billion at 31 December 2014 from US$ 32.7 billion as at 2013 year-end. The growth in total assets was primarily due to a 6.7% growth in the loans and advances portfolio to US$ 18.5 billion (31 December 2013: US$ 17.3 billion). This balanced credit growth was underpinned by a 4.4% growth in customer deposits to reach US$ 23.0 billion (31 December 2013: US$ 22.0 billion). Asset quality of the Group improved with the non-performing loan ratio reducing to 2.0% as at 31 December 2014 (31 December 2013: 2.3%) with a specific provision coverage ratio of 83.8% (31 December 2013: 86.1%). The total provision coverage ratio, inclusive of collective impairment provisions, was 159.4% as at 31 December 2014 (31 December 2013: 155.5%).
Core operating return on Average Equity for 2014 increased to 15.2% (2013: 13.4%) and the core operating return on Average Assets for 2014 increased to 1.6% (2013: 1.3%), adjusted for exceptional non-recurring items.
The resultant basic earnings per share were US cents 8.0 for the year ended 31 December 2014 (2013: US cents 10.0). Given the excellent results achieved, the Board of Directors has recommended a cash dividend of US cents 4.5 per share (2013: US cents 4.5) together with a bonus ordinary share issue of 5% (2013: 5%).
“AUB’s diversified business model combined with its growing cross border business flows and prudent deployment of liquidity have resulted in the total operating income surging past the US$ 1 billion mark. The increase in the operating net profit bears testament to AUB’s strong underlying business fundamentals and to its effective control framework and resilient business model. While operating challenges remain, we start 2015 with clear plans and goals to improve on our past performances and we will continue to strive to meet the aspirations of all our stakeholders”, commented Mohammad Jassim Al-Marzooq, Acting Chairman, AUB.
Ahli United Bank
Ahli United Bank BSC (AUB) is a full fledged commercial and investment banking group providing wealth management, retail, corporate, treasury, offshore and private banking services.
The Group's businesses consist of the operations in Bahrain, a wholly owned subsidiary in the UK and associates in Kuwait, Qatar, Oman, Egypt and Iraq. In Kuwait, AUB has an effective holding of 75% in the Bank of Kuwait and The Middle East while in Qatar, AUB has a 40% stake in Ahli Bank QSC. In Oman, AUB has a 35% stake in Ahli Bank SAOG while in Iraq AUB has a 49% stake in the Commercial Bank of Iraq. In Egypt, AUB, its associate banks and other Gulf financial institutions together hold an 89.3% stake in Ahli United Bank SAE. Apart from these banks, AUB has a nominal stake of 75% in KMEFIC, a brokerage, asset management and corporate finance company based in Kuwait with operations around the Arabian Gulf.
Overall, the AUB Group, through its subsidiaries and associates, operates through a network of 93 branch offices and employs over 3,000 people.
AUB’s stated mission is to create an unrivalled ability to meet customer needs, provide fulfillment and development for staff and to deliver outstanding shareholder value. AUB’s strategy is to expand through both organic growth and acquisition in order to act as a ‘multifaceted financial bridge’ between the international financial markets and its Gulf clients. It has sought to establish an operating presence in each of the Pan-GCC countries with a targeted 10% - 20% market share. To this end, AUB continues to develop and invest to increase its ability to acquire new businesses and rapidly integrate them with the bank’s systems. This development has helped accelerate progress in the delivery of financial services and penetration into targeted geographical markets.