AHLI UNITED BANK RELEASES 2006 RESULTS Bank Achieves Another Record Profit Of US$ 207.5 Million
Ahli United Bank B.S.C. (AUB), one of the region’s leading banking institutions, has announced today record results for 2006. The Bank reported a consolidated net profit, attributable to the Bank’s equity shareholders, of US$ 207.5 million, which represents a 25.8 % increase over the comparable figure for 2005 of US$ 164.9 million.
Keeping in line with its regional expansion strategy, the Bank led a consortium of regional financial institutions and pension funds to acquire a 89.3% stake in Delta International Bank, S.A.E. (“DIB”) in Egypt, with the AUB and its group banks retaining a 49.8% direct stake in DIB. Further, the Bank achieved significant organic expansion resulting in an increase in its assets to US$20.8 billion from US$13.9 billion at the end of 2005. Loans and advances increased by 48.3% from US$6.0 billion (2005) to US$8.9 billion (2006), supported by a 35.8% increase in customers’ deposits from US$6.7 billion (2005) to US$9.1 billion (2006).
Total operating income increased by 37.3% to US$ 492.9 million from US$ 358.9 million in 2005, despite continuing pressures on asset margins and an increasingly competitive environment. The resultant return on average shareholders equity increased to 15.1% (2006), up from 13.5% (2005), reflecting a more optimum and effective utilisation of capital resources, despite the increase in equity funds from $1.6 billion in 2005 to $1.8 billion in 2006.
The Bank’s focused and successful pursuit of its growth strategy led to the completion of a landmark deal with the International Finance Corporation (“IFC”) the World Bank’s private sector financing arm, with IFC providing a US$200 million Tier 2 convertible subordinated debt facility, making it IFC’s largest single investment to date in the MENA region.
Based on the results achieved and taking into consideration future capital needs, the Board recommends an increased cash dividend of 3.5 cents per share (2005: US cents 3.0) together with a bonus share issue of 10% i.e. one ordinary share for every 10 ordinary shares held, with necessary adjustments to outstanding convertible issues.
“Ahli United Bank’s 2006 results reflect the major strides we have made this year towards becoming the Gulf region’s leading integrated banking group, integrating all our regional subsidiaries and entering into Egypt, a large market with multiple linkage to our core GCC markets. 2006 was a significant year for us, as the Bank executed several milestone transactions and received many international accolades for its regional achievements and product expertise.” said Mr. Fahad Al-Rajaan, Chairman of AUB.
“During the year, we concluded a US$200 million Tier 2 eligible subordinated debt with IFC and secured a US$1.2 billion syndicated term debt raised from a large number of top tier international banks, the largest ever syndicated loan deal by any financial institution in the Middle East. These funding successes set the platform for the Bank’s continuing organic growth and market expansion into 2007.” added Mr. Al-Rajaan.
“The Bank’s sustainable and strong performances to date were recognised internationally, by receiving several prestigious “Best Bank” awards. These include – “Best Bank 2006 – Middle East and Africa” (awarded by Global Finance); “Global Bank of the Year 2006 – Middle East” (The Banker); “Best Foreign Exchange Bank – Middle East 2006” (Global Finance); “Best Bank and Bank of the Year 2006 – Bahrain” (Global Finance, Euromoney and The Banker). Furthermore, the Bank’s long term issuer default rating was also upgraded by Fitch from BBB+(stable) in 2005 to A-(stable) during the year.” concluded Mr. Al-Rajaan.