UAB reports AED 17 million net profit
United Arab Bank P.J.S.C (‘UAB’ or ‘the Bank’) reports its financial results for the 12 months to 31 December 2017.
UAB reported a Net Profit of AED17 million in 2017 as the successful execution of its Transformation Strategy paved the way for a return to profitability. Notably, 2017 was the final year of transition for UAB as the Bank embarked on its journey to become a safer, stronger and sustainable Bank. Central to this Transformation Strategy were four key pillars: pro-actively deleverage higher risk non-core portfolios; reduce costs; enhance the Bank’s risk and control frameworks; and strengthen key banking fundamentals tapping into new funding lines globally. With the continuing support of UAB’s Board and shareholders, the Bank is well positioned to generate sustainable returns going forward.
“We are pleased with the financial performance in the year 2017 as the Bank successfully concluded its Transformation Strategy. We have substantially strengthened our Balance Sheet, focused on our core activities, de-risked the business and captured material cost savings. The Board and I are confident that our revised and efficient business model which is backed by the strong economy in the UAE and business environment positions us well to continue doing the right thing for our customers and deliver sustainable returns for our shareholders,” said HE Sheikh Faisal Bin Sultan Bin Salem Al Qassimi, Chairman of the Board of Directors.
UAB has reported a net profit of AED 17m for twelve months ended 31 December 2017. The successful execution of the transformation strategy has resulted in the Bank recording significant progress in deleveraging its ‘non-core’ higher risk portfolios. These have been managed down 88 per cent since 30 September 2015 being the implementation date of the Transformation Strategy.
With the Bank redeploying its capital in the lower risk core businesses, total Income reduced to AED677 million in 2017, from AED861 million in FY 2016, whilst non-interest income increased to 28 per cent of total income vs. 26 per cent in 2016. The Bank’s provisions for credit losses of AED 289m represent a healthy reduction of 71 per cent compared to 2016 on the back of prudent risk management,
Despite challenges faced, UAB’s capital adequacy and liquidity ratios were maintained above the Central Bank of UAE minimum requirements. Capital adequacy ratio was at 13.2 per cent, whilst the liquidity profile remained strong with robust Loan to Deposit Ratio of 87 per cent. Customer Deposits being 81 per cent of Total Liabilities, have and will continue to represent the Bank’s key source of funds.