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AUB net profit surges by 11.3% to US$ 537.2 million in 2015


Ahli United Bank B.S.C. (AUB) reported a record net profit attributable to its equity shareholders of US$ 537.2 million for the year 2015, representing a growth of 11.3% compared to a net profit of US$ 482.5 million in 2014. The net profit in Q4/2015 was US$ 118.0 million as compared to US$ 106.2 million in Q4/2014.

The positive operating results of AUB were primarily driven by the growth in its core operating earnings across its major lines of business and markets, despite the continuing general weakness in economic trends regionally and globally, witnessed during 2015. The surge in operating income was underpinned by a 6.7% rise in net interest income (NII) to US$ 814.7 million despite the prevalence of very low absolute interest rate levels. The NII increase was achieved through a moderated increase in lending volumes as well as by a prudent deployment of liquidity in non-trading high quality investments within a conservative and diversified risk framework. The result was also complemented through focused liability cost management which improved NII margins. Total operating income grew by 4.9% to reach US$ 1,091.9 million (2014: US$ 1,041.3 million).The higher operating income and disciplined cost culture across the AUB Group further improved the operating cost income ratio to 28.3% (2014: 29.2%).

The Group’s total assets increased by 1.6% to reach US$ 34.0 billion at 31 December 2015 from US$ 33.4 billion as at 2014 year-end. The growth in total assets was primarily due to a 4.8% growth in the loans and advances portfolio to reach US$ 19.4 billion (31 December 2014: US$ 18.5 billion). Balanced credit growth was supported by a 2.1% growth in customer deposits to reach US$ 23.5 billion (31 December 2014: US$ 23.0 billion). The non-performing loan ratio reduced to 1.8% as at 31 December 2015 (31 December 2014: 2.0%) with a healthy specific provision coverage ratio of 84.6% (31 December 2014: 83.8%). The total provision coverage ratio, inclusive of collective impairment provisions, was also increased to 181.9% as at 31 December 2015 (31 December 2014: 159.4%) as part of the AUB Group’s effort to enhance its risk coverage position.

Through improved earnings and judicious cost management, return on Average Equity increased to 16.0% (2014: 15.2%) while the return on Average Assets increased to 1.7% (2014: 1.6%).

The resultant basic earnings per share were US cents 8.1 for the year ended 31 December 2015 (2014: US cents 7.6). Given the challenging business environment, the Board of Directors has recommended unchanged distribution comprising a cash dividend of US cents 4.5 per share (2014: US cents 4.5) together with a bonus ordinary share issue of 5% (2014: 5%).

Mr. Hamad Al-Humaidhi, AUB Chairman, commented: ”AUB continued its robust performance in 2015 crossing for the first time US$ 500 million benchmark in terms of operating net profit, in the face of strong economic headwinds. The 2015 result is a testament to AUB’s well-managed business model based on diversification, targeting of cross border flows and selective growth initiatives to increase operating income that continue to serve the Bank well. AUB is also proud to have successfully completed a US$ 400 million issue of Additional Tier 1 Perpetual Basel III Compliant Capital Securities in April 2015 at a very competitive pricing under very challenging market conditions. This represents an important step forward in terms of the evolution and diversification of the Group’s capital structure.“

”While risks to the global economic outlook remain high and a continuing slowdown in regional economies looms large, AUB remains cautiously confident of its resilience and ability to maintain its performance given its strong underlying operating fundamentals and its prudent, proactive management of risks and costs.“ added Mr. Al-Humaidhi.