Ahli United Bank net profit surges 11% to $537m

Muscat: Ahli United Bank (AUB) posted a record net profit attributable to its equity shareholders of $537.2 million for the year ended 2015, a growth of 11.3 per cent compared to a net profit of $482.5 million in 2014.
The net profit in the fourth quarter of 2015 was $118 million as compared to $106.2 million for the same period in the previous year.
The positive operating results of AUB were primarily driven by the growth in its core operating earnings across its major lines of business and markets, despite the continuing general weakness in economic trends regionally and globally, witnessed in 2015.
“AUB continued its robust performance in 2015 crossing for the first time $500 million benchmark in terms of operating net profit, in the face of strong economic headwinds. The 2015 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 the Bank well,” said Hamad Al Humaidhi, chairman of Ahli United Bank.
“AUB is also proud to have successfully completed a $400 million issue of Additional Tier 1 Perpetual Basel III Compliant Capital Securities in April 2015 at a very competitive pricing under very challenging market conditions. This represents an important step forward in terms of the evolution and diversification of the Group’s capital structure,” he added.
The surge in operating income was underpinned by a 6.7 per cent rise in net interest income to $814.7 million despite the prevalence of low absolute interest rate levels. The net interest income increase was achieved through a moderated increase in lending volumes as well as by a prudent deployment of liquidity in non-trading high quality investments within a conservative and diversified risk framework.
The result was also complemented through focused liability cost management which improved net interest income margins. Total operating income grew by 4.9 per cent to reach $1,091.9 million (2014: $1,041.3 million).The higher operating income and disciplined cost culture across the AUB Group further improved the operating cost income ratio to 28.3 per cent (2014: 29.2 per cent).
Group’s total assets increased by 1.6 per cent to touch $34 billion in December 2015 from $33.4 billion in 2014. The growth in total assets was primarily due to a 4.8 per cent growth in the loans and advances portfolio to reach $19.4 billion (December 2014: $18.5 billion).
Balanced credit growth was supported by a 2.1 per cent growth in customer deposits to reach $23.5 billion (December 2014: $23 billion). The non-performing loan ratio reduced to 1.8 per cent as at December 2015 (December 2014: 2 per cent) with a healthy specific provision coverage ratio of 84.6 per cent (December 2014: 83.8 per cent).
“While risks to the global economic outlook remain high and a continuing slowdown in regional economies looms large, AUB remains cautiously confident of its resilience and ability to maintain its performance given its strong underlying operating fundamentals and its prudent, proactive management of risks and costs,” said Al Humaidhi.