United Arab Bank (UAB) has announced its financial results for the six months ended June 30, 2023, reporting a net profit of AED 120.5 million. This figure represents a significant increase of 45 percent compared to the net profit of AED 83.3 million achieved in the same period in 2022.
The growth in net profit can be attributed to improved Net Interest Income and lower provision charges. UAB’s core businesses recorded a notable 12 percent growth in total operating income during H1 2023, with a remarkable 36 percent increase in Net Interest Income.
The bank’s strategic focus on quality assets and improved portfolio underwriting contributed to a substantial reduction of 59 percent in provision charges during H1 2023 compared to the same period in the previous year. Additionally, higher recoveries further strengthened UAB’s financial performance.
A significant boost to the bank’s capital base occurred in Q1 2023 through the issuance of an AT1 capital instrument, amounting to a total of USD 150 million. This strengthened UAB’s capital adequacy ratio (CAR) to 19.6 percent and its Tier 1 Capital ratio to 18.5 percent, both comfortably exceeding the applicable regulatory requirements.
UAB maintains a robust liquidity profile, with an advances to stable resources ratio of 82 percent and an eligible liquid asset ratio of 18 percent, both well above regulatory thresholds. The bank’s Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) also remain well above 100 percent, reflecting its commitment to sound financial management.
Demonstrating a prudent approach to provisioning, UAB maintains an adequate Provision Coverage ratio of 110 percent as of H1 2023. Additionally, the Non-Performing Loan (NPL) Ratio improved significantly to 6.7 percent, marking a remarkable enhancement from 10 percent in H1 2022.
UAB’s strategic focus revolves around growth and revenue generation in its Wholesale Banking, Retail Banking, and Treasury & Capital Markets segments. Simultaneously, the bank is working on adopting a more agile operating model that incorporates technology and digital solutions, positioning itself as the preferred partner for its customers.
Sheikh Faisal bin Sultan bin Salem Al Qassimi, Chairman of the Board of Directors, UAB, expressed his delight with the bank’s financial performance in the first half of 2023. He emphasized UAB’s commitment to adhering to best banking practices and modernizing its technical infrastructure in alignment with its sustainable growth strategy.
Shirish Bhide, Chief Executive Officer of United Arab Bank, highlighted the bank’s strong performance across all business lines and expressed confidence in achieving its short and medium-term strategic goals. Bhide further emphasized UAB’s dedication to providing clients with tailored products and solutions to help them achieve their financial objectives. The bank also remains committed to leveraging technology to enhance the banking experience and convenience for its customers.
With a strong economic landscape in the UAE and a firm growth trajectory, UAB is well-positioned to continue its success and deliver value to its stakeholders. The bank’s focus on strategic growth, prudent risk management, and customer-centric approach underpin its commitment to maintaining a leading position in the banking sector.
