TIDM16PU
RNS Number : 2819P
Ahli United Bank B.S.C.
08 February 2023
Press Release
AHLI UNITED BANK B.S.C. REPORTS AN INCREASE IN NET PROFIT TO
US$ 203.9 MILLION ATTRIBUTABLE TO OWNERS OF THE BANK FOR THE
THREE MONTHS ENDED 31 DECEMBER 2022
Release Date : 2 February 2023
Ahli United Bank B.S.C. (AUB) reported a record net profit
attributable to its equity shareholders of US$ 203.9 million for
Q4/2022, which represents a 30.2% increase over the Q4/2021
reported net profit of US$ 156.6 million. The Q4/2022 net profit is
the highest quarterly profit achieved by the bank since its
establishment in 2000. It was primarily driven by higher operating
income and lower provision charges given AUB's conservative forward
looking provisioning measures undertaken in the preceding
quarter.
The Basic and Diluted Earnings per Share increased to US 1.6
cents in Q4/2022 versus US 1.2 cents in Q4/2021. Comprehensive
income attributable to the owners of the bank for Q4/2022 was at
US$ 113.5 million (Q4/2021: US$ 147.5 million, -23.0%). The core
operating performance during the quarter was strong with net
interest income increasing to US$ 242.5 million in Q4/2022
(Q4/2021: US$ 227.6 million, +6.6%) and total operating income
surging to US$ 341.4 million in Q4/2022 (Q4/2021: US$ 282.7
million, +20.7%).
It should be noted that AUB's financial results from Q4/2022 are
consolidated into Kuwait Finance House K.S.C.P (KFH) as per the
applicable international financial reporting standards, as the
Effective Date for acquisition was 2 October 2022.
AUB reported a net profit attributable to its equity
shareholders of US$ 546.1 million for the full year 2022 which
represents a 10.1% decrease over the 2021 reported profit of US$
607.2 million. This is entirely attributable to the higher
exceptional precautionary non-recurring provision charge of
US$160.2 million incurred during Q3/2022. Basic and Diluted
Earnings per Share in 2022 is US 4.5 cents, as compared to US 5.1
cents in 2021. Total comprehensive income attributable to the
owners of the bank for 2022 was US$ 261.2 million (2021: US$ 641.3
million, -59.3%). Net interest income for 2022 was US$ 909.1
million (2021: US$ 871.8 million, +4.3%) primarily achieved through
an increase in interest earning assets. Total operating income for
the 2022 was US$ 1,236.9 million (2021: US$ 1,108.9 million,
+11.5%).
The Group's equity attributable to owners as at 31 December 2022
marginally decreased by 2.1% on a comparative basis to US$ 4.4
billion due to dividend distribution and forex revaluation changes
(31 December 2021: US$ 4.5 billion). The AUB Group's total assets
as at 31 December 2022 were US$ 41.6 billion (31 December 2021: US$
41.9 billion, -0.8%). Return on Average Equity for 2022 was 12.3%
(2021:14.7%) and Return on Average Assets stood at 1.4% for 2022
(2021: 1.6%).
It should be noted that without the precautionary non-recurring
ECL 1 & 2 provision charge of US$ 160.2 million recorded in
Q3/2022, Return on Average Equity adjusts to 15.4% and Return on
Average Assets to 1.7%, above the comparative period in 2021, in
line with AUB normal historic operating levels.
The Group improved its already solid asset quality in 2022 with
a gross non- performing loan (Stage 3) ratio of 1.9% (31 December
2021: 2.4%), which represents one of the lowest NPL ratio ever
achieved by AUB. The provision coverage ratio for Stage 3 loans was
extremely conservative at 84.5% (31 December 2021: 83.1%) and is
calculated on a cash provision basis excluding the value of the
substantial additional non-cash (real estate and securities)
legally assigned collaterals available against non-performing loans
of US$ 491.2 million in value (31 December 2021: US$ 364.5 million
in value). Stage 1 and Stage 2 ECL provisions for the non-impaired
loans surged to 1.0% and 13.5% at 31 December 2022 as compared to
0.9% and 11.4% at 31 December 2021, which stand well above the
regional banking sector averages, funded by the precautionary
provisions recorded by the bank in Q3/2022.
The cost to income ratio for 2022 was at 29.7% (2021: 29.5%)
reflecting AUB's continuing structured efforts to enhance
operational efficiencies through the progressive roll-out of
automation and digitization initiatives as part of the AUB Group's
transformation plan and the gradual harvesting of its data
initiatives.
The Board of Directors has recommended a distribution comprising
of a cash dividend of US cents 2.5 per share, subject to AUB Annual
General Assembly approval.
The AUB Deputy Chairman, Mohammad Fouad Al-Ghanim commented
"Despite a challenging background of the prolonged Russia-Ukraine
conflict, increasing inflationary pressures, slowdown in the global
economy and overall market volatility, AUB achieved strong results
in 2022 with its total operating income increasing by 11.5% proving
once again the solidity and resilience of its multimarket business
model as well as its prudent risk management approach. Excluding
the non recurring additional precautionary provision charge of US$
160.2 million taken in Q3/2022 from non-distributable
pre-acquisition profits for KFH shareholders, the AUB Group
achieved record financial results in 2022 with consolidated NPAT
reaching to US$ 706.3 million, a 16.3% increase over the previous
year NPAT and the second highest NPAT achieved in its history".
Mr. Al-Ghanim added: "During 2022, AUB successfully acquired
Citibank's Consumer Banking business in Bahrain. The acquisition
which included the retail banking, credit card, and unsecured
lending businesses of Citibank Bahrain has provided critical mass
to AUB in highly profitable retail and premium segments and has
enabled AUB to significantly enhance its market share in the
Bahrain credit card business. During the year, AUB has also
successfully concluded a landmark US$ 1.1 billion Sustainable
Murabaha Financing Facility, making it the first ever issuance of
its type raised by a financial institution worldwide. The
Sustainable Murabaha Financing Facility attracted very high demand
from regional and international banking investors demonstrating and
reinforcing AUB's credentials as a leading and innovative market
player."
He concluded by stating that: "The KFH acquisition which was
concluded in November 2022 is a key milestone in AUB's corporate
evolution and a strong testament to AUB's excellent financial
performance over the past 23 years and of the stellar value
accretion achieved for its shareholders. The transaction valued AUB
at US$ 10.7 billion which translated to an IRR of c.17.0% p.a. for
AUB shareholders over the 23 year period since the bank's
establishment. It also represents attractive exit P/E and P/BV
multiples of 16.6x and 2.5x respectively. This transaction has laid
the foundation for the creation of a leading Shari'a compliant bank
in the regional and global banking space and should provide a very
solid platform for achieving the aspirations of its combined
shareholders."
About Ahli United Bank (AUB)
Ahli United Bank B.S.C (AUB) is a leading pan-regional financial
services provider, incorporated in Bahrain in May 2000. It offers a
full range of retail, commercial and private banking & wealth
management services across the MENA region and the UK. AUB operates
through its Bahrain Head Office and its subsidiaries in Kuwait,
Egypt, Iraq, and the UK as well as its associates in Oman and
Libya; and a branch in the UAE (DIFC).
AUB has become a subsidiary of Kuwait Finance House K.S.C.P.
since 2 October 2022.
AUB's excellent track record over the past 23 years has earned
it a string of prestigious local and regional accolades over the
years, including the "Best Bank in Middle East" award 8 times by
the leading international publications such as The Banker,
Euromoney and Global Finance.
Ends
The press release and full set of the consolidated financial
statements for the year ended 31 December 2022 are available on the
Bahrain Bourse, Boursa Kuwait
and AUB websites.
www.ahliunited.com
http://www.rns-pdf.londonstockexchange.com/rns/2819P_1-2023-2-8.pdf
Trading Code Bahrain Bourse and Kuwait Boursa: AUB
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