union national bank announces net profit for the first half of 2007
of aed 538.1 million
Union National Bank’s consolidated net profit attributable to equity shareholders reached AED 538.1 million for the first half of 2007 as compared to AED 627.3 million for the corresponding period of 2006. The net profit for the second quarter of 2007 of AED 285.6 million, compared to AED 204.8 million for the same period in 2006, increased by 39% quarter-on-quarter reflecting solid growth in business and income from the core banking activities.
The net loans and advances have grown by 41% to reach AED 31.5 billion as at 30 June 2007 (30 June 2006: AED 22.2 billion), whilst customers’ deposits have increased by 32% over the same period to grow from AED 23.6 billion as at 30 June 2006 to AED 31.1 billion as at 30 June 2007. These increases contributed to the consolidated total assets as at 30 June 2007 reaching AED 45.3 billion as compared to AED 33.8 billion for the same period last year, an increase of 34%.
The return on average assets of 2.5% and return on average equity of 18.2 % for the first half of 2007 remained satisfactory. The operating expenses increased by 26.7% in the first half of 2007 as compared to the corresponding period last year mainly due to the consolidation effect of Al Wifaq Finance Company and Alexandria Commercial & Maritime Bank, new subsidiaries of the Group and in keeping with the Group’s strategy to increase its distribution network and investment in IT systems and staff, to be at the forefront in providing superior customer experience. The efficiency ratio (cost to income) of 29.4% for the first half of 2007 continued to compare favourably with that of other regional and international banks.
Pursuant to the capital increase of Alexandria Commercial & Maritime Bank (ACMB), Egypt in the second quarter of 2007, the shareholding in ACMB went up marginally and is presently at 94.9%. ACMB has embarked on various key strategic initiatives to improve its franchise and business in Egypt.
Al Wifaq Finance Company, a subsidiary of the Bank offering Shari’a compliant Islamic financing has been making satisfactory progress growing its business and profits since its establishment last year. Al Wifaq moved to its new Head Office premises at the Airport Road, Abu Dhabi with an official inauguration slated for later in the year.
As part of the Bank’s ongoing expansion policy and in line with its continuous efforts to provide superior services to better serve its customers, UNB formally inaugurated 4 new branches (2 in Dubai, and 2 in Al Ain).
The Bank’s subsidiary, Union Brokerage Company (UBC), also expanded its network with the inauguration of its Dubai office. UBC launched its fully integrated, state-of-the-art, 24/7 dedicated Call Center in addition to launching its On-line trading facility.
Two of the leading external rating agencies, Capital Intelligence (CI) and Fitch Ratings upgraded the Bank’s ratings in the first half of 2007. CI raised the financial strength rating of the Bank to A+, from A, whilst reaffirming the foreign currency ratings at A+ long-term and A1 short-term. Recently, Fitch Ratings upgraded the Long-term foreign currency IDR of the Bank to 'A+' from 'A'.
