Ahli United Bank Reports a Record Profit of Us$ 502.2 Million

30/10/2013 15:30 AST

Ahli United Bank B.S.C. (AUB) reported a net profit attributable to its equity shareholders of US$ 502.2 million for the nine months ended 30 September 2013. This included an exceptional gain of US$ 212.9 million on the sale of its 29.4% stake in Ahli Bank Qatar (ABQ).

Core earnings increased by 9.5% to US$ 289.3 million compared to YTD 30 September 2012 net profit of US$ 264.2 million. Q3/2013 net profit was 8.6% higher at US$ 99.1 million compared to US$ 91.3 million for Q3/2012.The Basic Earnings per Share were US 9.2 cents, compared to US 4.8 cents achieved in Q3/2012. The resultant adjusted Operating Basic Earnings per share was US 5.3 cents excluding the exceptional gain.

The operating income of the Group increased from US$ 660.9 million to US$ 700.8 million in YTD 30 September 2013 (+ 6.0%), driven largely by growth in net interest income (NII) by 11.7% to US$ 524.6 million (Q3/2012: US$ 469.6 million) and a 10.3% growth in fee income from US$ 96.7 million to US$ 106.7 million. The NII increase was achieved through effective asset liability management measures undertaken to reduce funding costs and a prudent increase in asset volumes within acceptable risk criteria thereby improving core operating income. The cost income ratio was contained at 29.6% (Q3 / 2012: 29.7%).

The Group’s total assets rose by US$ 1.9 billion (+ 6.5%) to US$ 31.8 billion since 31 December 2012. Besides net equity accretion by US$ 0.3 billion during the current period, the total assets increase was funded by incremental customers’ deposits of US$ 3.9 billion (+21.8%) to reach US$ 22.2 billion as at 30 September 2013, with the surplus liquidity utilized to reduce money market deposits by US$ 1.2 billion and repo borrowings by US$ 1.1 billion. On the assets front, the loans portfolio grew by US$ 1.2 billion (+7.7%). The nonperforming loan ratio was 2.6% as at 30 September 2013 (31 December 2012: 2.4%) and the specific provision coverage ratio as at 30 September 2013 stood at 89.4% (31 December 2012: 87.7%). The total provision coverage ratio, inclusive of collective impairment provisions, was 150% as at 30 September 2013 (31 December 2012: 150%), as part of AUB’s ongoing prudent risk management strategy.

The Group’s Operating Return on Average Equity for the period ended 30 September 2013, excluding the exceptional gain, was higher at 14.2%, compared to 13.3% achieved in the prior period. Return on Average Assets, on the same basis, was higher at 1.4% for Q3/2013 (Q3/2012: 1.3%).

Given AUB’s solid financial and operational performance, the International Finance Corporation Capitalization Fund (“IFC Fund”) has, at its option, accelerated the conversion of its investment of US$ 125 million in AUB’s Mandatorily Convertible Preference Shares (MCPS) into AUB common shares. Subsequent to 30 September 2013, the MCPS was converted into AUB common shares at an effective conversion price of US 74.83 cents per share, translating into the issue of 167,045,454 additional AUB common shares. Post conversion, the IFC Fund has a 2.95% shareholding in AUB.

“AUB’s resilient performance in a challenging operating environment is reflected in its continuing healthy growth in operating profit which grew by around 9.5% during the current period. This bears testament to the strength and diversification of the AUB Group business model.” said Fahad Al-Rajaan, Chairman, AUB.

Mr. Fahad Al Rajan, AUB Chairman further added that, “IFC Fund’s decision to exercise the conversion option prior to the mandatory conversion date at a price in excess of prevailing market price is a strong vote of confidence in the solid fundamentals of AUB and its regional business strategy.”

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