Dubai: United Arab Bank (UAB) reported on Monday a swing to profitability, with Dh17 million in net profit for 2017 compared to Dh523 million in net loss a year earlier.
The turnaround came as the Sharjah-based bank implemented a transformation strategy that led UAB to reduce its non-core portfolio by 88 per cent. UAB’s provisions for credit losses also declined 71 per cent year-on-year to Dh289 million.
In a statement, the bank said it is “well-positioned to generate sustainable returns going forward” after it concluded its transformation strategy.
“We have substantially strengthened our balance sheet, focused on our core activities, de-risked the business, and captured material cost savings,” said Faisal Bin Sultan Al Qassimi, chairman of UAB.
The bank said that going forward, it will focus on improving its core business.
In 2017, UAB’s total income reached Dh677 million, down from Dh861 million a year earlier as the bank attributed that to a redeployment of capital to lower risk business.
As part of its strategy, UAB deleveraged higher risk non-core portfolios, cut costs, enhanced its risk frameworks, and tapped into new funding lines globally, it said. In late January, UAB’s board of directors approved increasing the bank’s capital by Dh687.5 million through a rights issue.
The rights issue will double the capital to Dh1.37 billion.