Sunday 22, July 2018 by William Mullally

Ahli United Bank reports net profit of over $357 million for H1 2018

The Basic Earnings per Share (EPS) in H1/2018 were US 4.3 cents, compared to US 3.7 cents in H1/2017 (EPS US 2.1 cents in Q2/2018 versus US 1.7 cents in Q2/2017).

  

Ahli United Bank reported a net profit attributable to its equity shareholders of $357.4 million for the six months ended 30 June 2018.

The net profit reflected a robust growth of 14.8 per cent in H1/2018 as compared to the net profit of $ 311.3 million achieved in H1/2017. The Q2/2018 net profit of $ 182.7 million represents a 20.3 per cent improvement over the Q2/2017 quarter reported profit of $ span style="font-family: Times New Roman;">51.9 million. 

The Basic Earnings per Share (EPS) in H1/2018 were US 4.3 cents, compared to US 3.7 cents in H1/2017 (EPS US 2.1 cents in Q2/2018 versus US 1.7 cents in Q2/2017).

Net interest income improved by 12.3 per cent to $ 467.2 million during the first six months of 2018 (Q2/2018: +12.3 per cent versus Q2/2017) driven by improved margins and prudent growth in loan and investments. Increases in net interest income and other fee, trading and investment income resulted in a rise in operating income by 11.8 per cent (Q2/2018: +16.0 per cent versus Q2/2017). Furthermore, adoption of a consistent and disciplined intelligent spend approach together with operational efficiencies resulted in a lower cost to income ratio of 26.1 per cent (H1/2017: 27.3 per cent).

Solid asset quality levels were sustained with a gross non-performing loans ratio of 2.0 per cent (31 December 2017: 1.9 per cent) while specific provision coverage ratio increased to 89.2 per cent (31 December 2017: 85.1 per cent). The total provision coverage ratio, inclusive of expected credit loss provisioning under IFRS 9 but excluding significant non-cash collaterals available, improved to 228.9 per cent as at 30 June 2018 (31 December 2017: 154.3 per cent).

The Group’s Return on Average Equity (ROAE) for H1/2018, increased to 18.8 per cent, compared to 16.7 per cent achieved in the first half of 2017. Return on Average Assets also increased to 2.3 per cent for H1/2018 (H1/2017: 2.1 per cent).

Hamad Al-Humaidhi, AUB Chairman, commented, “Our results demonstrate AUB’s strong ability to deliver sustainable core earnings on a consistent basis through its diversified business initiatives and strategic investments across the Gulf and MENA region. Growth was underpinned by robust risk management, effective cost efficiency measures and continuing focus on the sourcing of remunerative cross border business flows.”

Al-Humaidhi also commented that “the MOU signed today with Kuwait Finance House (KFH) provides a non-binding framework to explore the establishment, in a structured manner, of a major regional banking institution capable of competing more effectively in its existing and new potential markets.”

He explained that the proposed transaction comprised three stages. The first stage involves both banks agreeing a fair exchange ratio for their shares based on valuation studies to be conducted by the selected international investment banks. Subject to such agreement on valuation and securing the necessary regulatory approvals, the second stage would commence in terms of conducting detailed due diligence on both banks with a view to finalising the share exchange ratio. The third stage will involve the assessment of the business prospects and opportunities of the combined entity and the submission of necessary applications to secure the required regulatory and statutory consents to consummate the combination.

Al-Humaidhi added, “The signed MOU is in line with the longstanding strategy adopted by AUB’s Board of Directors since inception in 2000, for pursuing inorganic growth in our targeted markets through mergers and acquisitions. This particular transaction involves a potential transformational deal to create a market leader in the regional and global banking space and to provide a very solid platform for achieving shareholder aspirations”. 

 

 

 

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