Habib Bank Ltd (HBL) is now in a position to write off all its bad loans in its books, which account for almost 60 per cent of the total assets of the bank in the UAE.

The bank has already made 100 per cent provisions for all its bad loans. The bad loans have come down from 73 per cent to 60 per cent in the year ending 2002.

The bank has been bringing down its bad loans gradually during the last couple of years through concerted steps such as litigations, write-offs, etc, so that the bank will come out with a clean asset book.

HBL is working towards building up quality new assets and the bank might think of expanding the capital base in order to satisfy the capital adequacy norms for an expanded asset portfolio. The bank presently has a paid up capital of Dh63 million.

"One single bad asset accounts for more than half of all the bad loans the bank currently sits on," said Asad Amir Khan, executive vice-president and regional general manager of the bank.

The UAE operations of HBL which posted a Dh4.3 million net profit for 2002 aims for a much higher net profit of Dh17 million for the current year.

The Oman operations of the bank which posted a big loss during 2001 announced a $619,000 net profit for 2002.

Likewise, Bahrain came out with a net profit of $179,000 for 2002 against $364,000 the bank posted for the previous year. The offshore operations in Bahrain registered a net profit of $1.9 million, marginally down from the previous year's net profit of $2.2 million.

HBL, which has eight branches in the UAE, three branches in Bahrain and 11 branches in Oman, is working on a consolidation plan for Oman operations which might see a merger of certain branches in Oman.

The bank is laying more emphasis on training of its staff. HBL has achieved the emiratisation level prescribed by the government for 2002.

The staff restructuring exercise carried out in the bank brought down the staff strength from 190 in 2000 to 130 as of now.

Several courses have been conducted for the HBL staff including courses on service excellence, trade finance, basic banking operations, anti-money laundering, among others, during the year.

The bank is currently investing heavily in the technological upgradation on a global basis, which will place HBL on par with any other multi-national bank on the IT front.