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AHLI UNITED BANK REPORTS NET PROFIT OF US$135.9 MILLION FOR THE FIRST HALF OF 2010

AHLI UNITED BANK REPORTS NET PROFIT OF US$135.9 MILLION FOR THE FIRST HALF OF 2010

Ahli United Bank B.S.C. (AUB) reported a net profit attributable to its shareholders of US$135.9 million for the six months ended 30 June 2010 (H1/2009: US$143.5 million), a 5.3% drop compared to the H1/2009 results. This includes the Q2/2010 profit US$70.2 million up by 6.8% over the trailing Q1/2010 quarter results of US$65.7 million.

The Bank’s H1/2010 results were driven by an increase in net interest income to US$239.2 million (H1/2009: US$224.3 million) resulting from judicious management of funding costs resulting in improving margins and prudent deployment of liquidity in risk assets. Loans and advances grew by 5.0% (+US$0.7 billion) to US$14.0 billion funded by a 7.7% growth in customer deposits (+US$1.0 billion). Total deposits grew by US$1.4 billion (+ 7.6%) to US$20.2 billion, as the Bank continued to focus on ensuring adequate liquidity under current operating conditions.

The Bank reduced the loan loss provision charge for H1/2010 to US$ 80.2 million (H1/2009: US$128 million) through focused risk management measures.

Overall, the Group’s return on average equity stood at 12.3% and its Return on Average Assets is at 1.2% in H1/2010. The resultant basic and diluted earnings per share stood at 2.8 US cents for the half year ended 30 June 2010.

This quarter also saw the successful conversion of AUB’s 75% subsidiary, BKME, into a full fledged Sharia compliant bank and its consequent rebranding as Ahli United Bank, Kuwait, effective 1 April 2010 as well as its first quarter of profitable operations under its new Sharia compliant format.

“It is encouraging to note that the Bank has delivered a profitable first half of what still remains a challenging year with improving quarter on quarter performance. It is also positive to note that both S&P and Capital Intelligence have re-affirmed their ratings for AUB at ‘A- (Stable)’ and ‘A (Stable)’ respectively, thereby acknowledging the Bank’s resilience under difficult operating conditions”, said Fahad Al-Rajaan, Chairman, AUB.

“In parallel to the improvement in our financial performance, we have continued to make progress on our strategy of taking the Group to new markets and further consolidating our ownership status in existing AUB Group banks. During 2010, we have increased our stake in AUB (Egypt) to 85.1% through 2 tender offers which concluded in January 2010 and July 2010 respectively. We have concluded a 40% stake acquisition in United Bank for Commerce & Investment (UBCI) in Libya which opens a new market for the AUB Group. Furthermore a tender offer is currently in process to increase our stake in Commercial Bank of Iraq (CBIQ) from 49% to 60% subject to market response. These moves are all integral to our business model of building a stronger regional banking platform focused on meeting our clients’ cross-borders needs and delivering outstanding value to our customers across the region and beyond”, Mr. Al-Rajaan added.