MANAMA: Bahrain-based Ahli United Bank B.S.C. (AUB) reported a net profit, attributable to its equity shareholders, of US$ 579.4 million for the year 2013, growth of 72.6% compared with US$ 335.7 million in 2012. This included an exceptional non-recurring gain of US$ 212.9 million on the sale of its 29.4% stake in Ahli Bank Qatar (ABQ). Excluding this item, the operating net profit of the Bank was US$ 366.5 million representing a 25.7% increase over the previous year. The last quarter of 2013 contributed US$ 77.2 million as compared to US$ 71.5 million in Q4/2012.
“AUB has managed to deliver a very strong set of results through its focused development of business opportunities and its prudent and pro-active management of risks,” Fahad Al-Rajaan, Chairman, AUB, said.
“Of particular satisfaction was the 25.7% surge in net profits, excluding the non-recurring impact of the Qatari affiliate stake sale. These results underpin the solidity of our business model, and AUB continues to remain confident of its ability to maintain its performance given its strong underlying fundamentals,” he added.
Operating income increased from US$ 848.7 million to US$ 958.3 million in 2013 (+ 12.9%), driven largely by a rise in net interest income (NII) of 12.1% to US$ 713.2 million (2012: US$ 636.4 million) and a 16.2% growth in fee income from US$ 121.4 million to US$ 141.1 million. The NII increase was achieved through focused liability cost management together with prudent growth in asset volumes within acceptable risk criteria. Increased operating income and disciplined cost culture aligned to business needs across the AUB Group further improved the operating cost income ratio to 30.0% (2012: 31.5%).
The Group’s total assets grew by US$ 2.8 billion (+9.3%) to reach US$ 32.7 billion by 2013 year-end. This is attributable to an 8.3% growth in the loans and advances portfolio to US$ 17.3 billion (31 December 2012: US$ 16.0 billion). Credit growth was funded by a 17.4% growth in customer deposits to reach US$ 22.0 billion (31 December 2012: US$ 18.8 billion). The non-performing loan ratio was 2.6% as at 31 December 2013 (31 December 2012: 2.4%) with a specific provision coverage ratio of 87.6% (31 December 2012: 87.7%). The total provision coverage ratio, inclusive of collective impairment provisions, was 149.4% as at 31 December 2013 (31 December 2012: 149.8%). Shareholders’ equity increased by US$ 0.4 billion (+13.4%) to US$ 3.1 billion.
Return on Average Equity was 20.1% (2012: 13.0%) with Return on Average Assets of 2.0 % (2012: 1.3%). Adjusting for the exceptional non-recurring gain of US$ 212.9 million, return on Average Equity increased to 13.4% while Return on Average Assets was sustained at 1.3%.
The resultant basic earnings per share was US cents 10.5 for the year ended 31 December 2013 (2012: US cents 6.1). Given the excellent results achieved, the Board of Directors has recommended a cash dividend of US cents 4.5 per share (2012: US cents 4.0) together with a bonus ordinary share issue of 5% (2012: 5%).
During the year, the International Finance Corporation Capitalization (Equity) Fund (“IFC Fund”) accelerated conversion of its holding in AUB’s US$125 million Mandatorily Convertible Preference Shares (MCPS) into 167,045,454 new AUB common shares. IFC Fund’s decision to exercise the conversion option prior to the mandatory conversion date represented a strong vote of confidence in the solid regional fundamentals of AUB and in its future business and growth prospects.