AUB Chairman Hamad Al-Humaidhi

KUWAIT: Ahli United Bank BSC (AUB) reported a net profit attributable to its equity shareholders of $570.6 million for the year 2016, representing a growth of 6.2 percent compared to a net profit of $ 537.2 million in 2015. The net profit in Q4/2016 was $ 128.5 million as compared to $ 118.0 million in Q4/2015.

Despite the continuing general weakness in the regional and global economies, the positive operating results of AUB were underpinned by prudent risk taking, effective asset and liability management and judicious cost controls. Net interest income (NII) grew by 1.7 percent from $814.7 million to $828.2 million. The NII increase was achieved through a prudent re-deployment of funds within a conservative and diversified risk framework. Fees, commissions & other income grew by 9.7 percent (+ US$ 15.4 million) to $173.3 million. As a result, total operating income grew by 5.2 percent to reach $1,149.0 million (2015: $1,091.9 million). The intelligent cost spend discipline instilled across all AUB Group units was sustained resulting in an improvement of the cost income ratio to 27.8 percent (2015: 28.3 percent).

The non-performing loan ratio was contained at 2.3 percent as at 31 December 2016 while maintaining a very solid specific provision coverage ratio of 84.9 percent (31 December 2015: 84.6 percent). The total provision coverage ratio was 155.6 percent (2015: 181.9 percent).

Overall Return on Average Equity (ROAE) increased to 15.7 percent (2015: 15.6 percent) while the Return on Average Assets (ROAA) increased to 1.8 percent (2015: 1.7 percent).

The resultant basic earnings per share were US cents 8.0 for the year ended 31 December 2016 (2015: US cents 7.7). Given the satisfactory results for the year, the Board of Directors has recommended distribution comprising a cash dividend of US cents 4.5 per share (2015: US cents 4.5) together with a bonus ordinary share issue of 10 percent (2015: 5 percent).

Hamad Al-Humaidhi, AUB Chairman, commented: "Despite the economic and security challenges faced in its operating markets, AUB continued its robust performance in 2016 maintaining growth in core earnings and operating net profit.  The 2016 result is a testament to AUB's well-managed business model based on diversification, targeting of cross border flows and selective growth initiatives to increase operating income that continue to serve AUB well.

During the year, AUB succeeded in expanding its geographic reach by opening its fully owned subsidiary Ahli United Bank Limited (AUBL) in Dubai International Financial Centre (DIFC), UAE. This launch enables AUB to offer corporate banking, private banking, wealth management, trade finance, treasury and cross-border financial products and services to its clients based in the UAE as well as in the wider Middle East region.  All these products and services are available on a conventional as well as on a Shari'a compliant basis through AUBL.  The launch of AUBL represents an important addition to the AUB Group and a key step forward in pursuing its defined strategy of targeted regional expansion, with emphasis on increasing cross border business flows. In December 2016, AUB received for the second time the "Bank of the Year, Middle East" award from the UK based The Banker magazine. "

"While operating challenges remain strong, AUB looks forward to 2017 with focused plans and objectives to advance our regional strategy in a balanced and prudent manner," added Al-Humaidhi.