United Arab Bank posts half-year profit as UAE economy gathers pace

Out-Law News | 22 Jul 2014 | 11:33 am | 1 min. read

United Arab Bank (UAB) has reported a net profit of 328 million Emirati dirham (AED) ($89m) for the first six months of 2014, an increase of 26% compared to the same period last year.

The chairman of UAB’s board Sheikh Faisal Bin Sultan Bin Salem Al Qassimi said: “We are well placed to take advantage of future growth opportunities across the Emirates and continue to benefit tremendously from the solid platform created by the banking alliance that we share with the Commercial Bank of Qatar, National Bank of Oman and Alternatifbank in Turkey.”

UAB generated operating profit of AED 475m ($129m), a 43% increase compared to the first six months of 2013. Total income increased at a rate of 41% to AED 676m ($184m). Customer loans and advances increased by 35% to AED 17.9 billion ($4.9bn) over the same period.

Chief executive officer Paul Trowbridge said: “With this outstanding performance, we are set to take advantage of the positive economic outlook for the UAE and the region... and strengthen our foothold in the UAE.”

Last month, UAB signed an exclusive five-year agreement with global insurer Zurich to market and cross-sell their general insurance products to customers across the UAE. The bank also announced the completion of a three-year syndicated Murabaha facility worth $100m with four banks based in the UAE, Bahrain and Kuwait, marking the first Islamic syndication completed by UAB and the first syndicated Murabaha raised in the UAE.

UAB was established in 1975 as a joint venture between UAE investors and Societe Generale. As of last month, the bank had a network of 27 branches and offices across the UAE with its headquarters in Sharjah.

The bank is one of the top 50 banks in the Gulf Cooperation Council (GCC) in terms of market capitalisation. In December 2007, UAB became part of a GCC regional banking alliance upon the acquisition of a 40% by the Commercial Bank of Qatar, Qatar's largest private sector bank.

In a report issued earlier this month, the International Monetary Fund (IMF) said the UAE’s overall banking system “maintains significant liquidity and capital buffers, and non-performing loans have begun declining from their post-crisis peak”.

The IMF said “following years of credit-less recovery, lending to the private sector has begun to rebound amid accelerating deposit growth”. However, the IMF warned of “potential risks from rapidly rising residential real estate prices and, more broadly, from the economy’s dependence on the global oil market, despite some recent progress in economic diversification”.