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AUB reports US$ 409.3 Million net profit for the nine month of 2020

November 12, 2020

Ahli United Bank B.S.C. (AUB) reported a net profit attributable to its equity shareholders US$ 115.9 million for Q3/2020, which represents a 35.9% decrease over the Q3/2019 reported profit of US$ 180.9 million. For the nine months ended 30 September 2020, net profit attributable to its equity shareholders was US$ 409.3 million, a decrease of 26.7% as compared to US$ 558.4 million achieved in YTD Q3/2019. Basic and diluted Earnings per Share in Q3/2020 were US 1.2 cents as compared to US 1.9 cents in Q12019 and US 4.1 cents for YTD Q3/2020 as compared to US 5.6 cents in YTD Q3;2019. Comprehensive income attributable to the owners of the bank for Q3;2020 was US$ 129.7 million compared to US$ 179.8 million in Q3/2019 and for YTD Q3./2020 was US$ 287.1 million as compared to US$ 577.8 million for YTD Q3/2019 due to unrealized financial adjustments related to temporary market fluctuations.

While Q3’2020 saw a gradual lifting of Covid-19 linked lockdowns by various countries followed by scattered signs of modest recovery, business sentiment continued to remain subdued affecting lending and liquidity opportunities which were further impacted by the continuing effect of lower oil revenues. As a result, Net Interest Income (NII) reduced by 16.9% to US$ 193.2 million in Q3 2020 (Q3’2019: US$ 232.5 million) and reduced by 17.0% to US$ 599.9 million for YTD Q3/2020 (YTD Q3/2019: US$ 722.7 million), Lower NII and Fees & Commission income resulted in lower Operating Income of US$ 247.4 million during Q3/2020 as compared to US$ 289.2 million in Q3/2019 whereas for the first nine months of 2020, Operating Income was US$ 823.0 million as compared to US$ 919.3 million in YTD Q3/2019. The cost to income ratio stood at 28.6% (YTD Q3/2019: 26.7%) reflecting AUB’s disciplined cost management culture.

AUB reported a non-performing loans ratio of 2.5% (31 December 2019: 1.9%) with specific provision coverage of 77.7% (31 December 2019: 85.9%). Total provision charges (net) were increased on a prudential and proactive basis to reach US$ 35.2 million for Q3/2020 (Q3/2019: US$ 4.9 million) and US$ 117.6 million for YTD Q3/2020 (YTD Q3/2019: US$ 39.2 million). Provision coverage levels are calculated on a cash provision basis excluding the value of the significant additional non-cash (real estate and securities) collaterals available against non-performing loans.

The AUB Group’s total assets at 30 September 2020 marginally increased (+1.0%) to US$ 40.7 billion (31 December 2019: US$ 40.3 billion). Return on Average Assets was at 1.4% for YTD Q3/2020 (YTD Q3/2019: 2.2%). The Group’s equity attributable to owners at 30 September 2020 decreased by 6.5% to US$ 4.0 billion (31 December 2019: US$ 4.3 billion). Return on Average Equity for YTD Q3/2020 was 12.7% (YTD Q3/2019: 18.1%).
Mr, Meshal Al Othman commented “Global and regional economies were deeply impacted by the Covid -19 out-break and the resultant extended lockdowns. The GCC economies were further hit by the continuing weakness in energy prices seriously limiting their budgetary spend and affecting business confidence”. He added “AUB will continue to conservatively navigate this challenging and unprecedented environment by providing a safe operating environment for all staff, clients and counterparties, building a seamless remote capability to transact business and support all our client needs until business as usual conditions can be restored.”