Dubai

United Arab Bank (UAB) reported net profit of Dh81 million for the firth half of 2017, up 46 per cent compared to Dh55 million in the same period in 2017.

For second quarter of this year, the bank reported a net profit of Dh45 million compared to Dh27 million in the same quarter last year.

“These results were achieved on the back of a healthy operating performance driven by higher ‘core’ business volumes and supported by disciplined risk management,” said Shaikh Faisal Bin Sultan Bin Salem Al Qassimi, Chairman of the Board of Directors of UAB.

The bank attributed the profit growth in the first half of the year to growth in ‘Core’ income and reduction in provision charges following a transition to a lower risk business model.

Total income for the first six months of the year was Dh341million with income generated from core businesses showing an uplift of 5 per cent over the first half of 2017.

The bank continued to generate stable net interest income streams recording a 3 per cent year on year growth to Dh253 million in the first half of 2018 from Dh245 million in the same period last year.

Customer loans across the bank’s core corporate and retail units remained stable compared to 2017 whilst the ‘non-core’ portfolio continued on its downward trajectory being managed down 89 per cent since the third quarter of 2015 and now constitutes less than 2 per cent of total loans with this absolute reduction driving the decrease in impairment losses, according to a Management discussion and analysis filed on the Abu Dhabi Stock Exchange (ADX).

Operating expenses for the first half of 2018 were Dh168 million representing a 4 per cent reduction compared to first half of 2017, as the bank continues to capture the benefits of the comprehensive review of its cost base completed as part of the wider transformation strategy.

Provision charges on a total portfolio basis continue to demonstrate significant improvement with a solid 20 per cent to Dh93 million in the first half of this year compared to Dh116 million in the same period last year. At the close of the first half of 2018 the bank has more than 100 per cent provision coverage ratio.

Operating expenses for the six months were Dh68 million, down 4 per cent compared to the first half of 2017. Bank continues to maintain robust liquidity profile with loans to deposit ratio at 92 at the close of the first half. Common equity tier-1 ratio is at 14.4 per cent.

“With the successful completion of rights issue in early 2018, we have started a new chapter in UAB’s journey on a solid footing which positions us well to deliver sustainable returns for our shareholders. As we look forward to the second half of 2018 and beyond, we will continue to strategically focus on our core businesses and continue to invest in our people, processes, systems and other critical infrastructure,” said Shaikh Mohammad Bin Abdullah Al Nuaimi, Acting Chief Executive Officer of UAB.