UAB announces net profit of AED 328 million for H1 2014 

UAB, recently recognized as the fastest growing bank in the region, announces a net profit of AED 328 million for the first six months of the year, an increase of 26 per cent over H1 2013.

Sheikh Faisal Bin Sultan Bin Salem Al Qassimi, Chairman of the Board of Directors said, “I am pleased with the strong performance generated by United Arab Bank this first half of 2014. The Bank continues to deliver exceptional performance and sustained growth, offering true value to our customers, shareholders and partners. It has maintained an impressive pace of growth in a highly competitive market, once again positioning itself as the fastest growing bank in the Middle East. We are well placed to take advantage of future growth opportunities across the Emirates and continue to benefit tremendously from the solid platform created by the banking alliance that we share with The Commercial Bank of Qatar (CBQ), National Bank of Oman (NBO) and Alternatifbank in Turkey.”

Mr Paul Trowbridge, Chief Executive Officer commented on the Bank’s half year results, “It is my pleasure to report a strong set of half-yearly financial results. Our exceptional growth over the same period in 2013 is testament to the effectiveness of our customer-centric strategy. The improving business mix and efficiency of our funding have led to a significant increase in Loans & Advances and Customer Deposits. These increased volumes are a direct result of our proactive enhancements and continued efforts to identify and develop new income drivers. With this outstanding performance, we are set to take advantage of the positive economic outlook for the UAE and the region”.

“Our emphasis on providing premium services, offering innovative solutions and ‘best in class’ products gives both our new and existing customers the best possible banking experience. We will continue to showcase our award-winning services to a wide range of customers and strengthen our foothold in the UAE, with branches in key locations to be accessible to all.”

The Bank generated Operating Profit of AED 475 million, a 43 per cent uplift over prior year. Total Income increased at an equally significant rate of 41 per cent to AED 676 million, with solid performance across both Net Interest Income and Non-Interest Income, up 40 per cent and 46 per cent respectively versus H1 2013.

Non-Interest Income, a general benchmark indicating the depth of customer relationships, expanded strongly in the first half to AED 183 million, driven primarily by Other Operating Income (AED 80 million) and Net Fees & Commissions (AED 61 million). With Non-Interest Income representing 27 per cent of Total Income in H1 2014, our strategic emphasis on building and developing customer relationships continues to reap rewards.

Operating Expenses for the first six months were AED 201 million versus AED 146 million for the same period in 2013, and remain in line with management expectations. Our ongoing network expansion programme continued across Q2, with the Bank now benefiting from 27 fully operational branches across the Emirates, with other locations planned in the second half of 2014.

Nevertheless, despite UAB’s sustained investment to improve the overall customer experience and developing infrastructure to support future growth, the Bank’s Cost: Income Ratio improved to 29.7 per cent.

Provision charges in H1 2014 were AED 147 million, compared to AED 72 million for the same period in 2013. The accelerated booking of General Provisions will ensure full and early satisfaction of central bank requirements. In parallel, the Bank continues to take a cautious and proactive approach to risk management, with our track record of growing our asset portfolio whilst maintaining quality evidenced by our sector leading Non-performing Loan Ratio (1.50 per cent) and Coverage Ratio (134 per cent) as at 30 June 2014.

Total Loans & Advances improved by 35 per cent to AED 17.9 billion versus H1 2013, with growth across all business units. Similarly, Customer Deposits increased by an outstanding 49 per cent in the same period to stand at AED 18.6 billion, further reinforcing the depth of our customer relationships and ongoing sustainability of UAB’s growth strategy.

Mr Trowbridge concluded, “Over recent years we have reshaped, simplified and strengthened the business to create a risk-efficient Retail and Commercial bank that is focused on our customers and supporting the wider UAE economy. Our growth has and will continue to be accomplished by preserving the strength of our asset portfolio, investing in our employees and most importantly building long-term relationships with our customers. In this way UAB aims to continue delivering true value to its shareholders.”

Source: cpifinancial

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