UAB’s third quarter net profit up 22 per cent to Dh88 million

Dubai: United Arab Bank (UAB) has reported Dh88 million net profit for the third quarter ended September 30, 2016.

The performance in the third quarter reflects continued positive traction against the bank’s transformation strategy and a substantial 44 per cent reduction in provisions for credit losses, stable non-interest income and material cost savings from its streamlined operating model.

“The bank continues to progress well against its strategy. The board and management team are committed to a clear approach: we set our priorities, we commit to our targets; and then we deliver,” said Shaikh Faisal Bin Sultan Bin Salem Al Qasimi, Chairman of the Board of Directors.

Bank’s total income was Dh211 million in the third quarter 2016 as the bank continues to deleverage its higher risk, albeit higher yielding non-core portfolios, offset by proactive cost of funds management.

The bank said it continues to generate solid performance across net fees and commissions and other operating income with non-interest income up 42 per cent compared to the third quarter of 2015. Operating expenses for the quarter were Dh90 million, 18 per cent down against the same three month period in 2015.

“As in previous quarters, these results further support our belief that the revised business plan is appropriate given the macro-economic environment and taken together, the picture in the third quarter is one of strong and accelerating progress against our transformation plan,” said Samer Tamimi, Acting Chief Executive Officer.

Provision for credit losses in the third quarter of 2016 were Dh104 million, lower by 10 per cent compared to the first two quarters and significantly lower from Dh466 million reported in the third quarter of 2015.

The bank said it is continuing with the transformation strategy. “Non-core deleveraging continues apace with 59 per cent reduction since September 30, 2015 whilst this portfolio now represents less than 7 per cent of our total loan book. Moving ahead, this remains a key element of the bank’s transformation with the recycled risk weighted assets, the key to unlocking the full earnings power of our core business units,” said Tamimi.

UAB remains strongly capitalised with its capital adequacy ratio at 16.1 per cent at the close of the third quarter of 2016.