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The Group, having made a strong start in Q-1, continued its growth momentum posting a record operating income for the first half of this year of $461.0m (30 June 2007: $313.1m an increase of 47.2% over the same period last year, supported by a strong underlying growth in core earnings.
The growth achieved in core earnings was mainly due to higher net interest margins earned on a prudently managed asset profile, supplemented by the accretive fee and commission income. Moreover, the Group's strategic investments have all contributed very positively taking advantage of the cross-border deal flow opportunities and the synergies accruing from a diversified regional presence in 5 Gulf countries with linkages to UK and Egypt. Overall the cost to income ratio improved to 32.4% (H-1/07 level of 35.2%).
The basic earnings per ordinary share for the six month period ended 30 June 2008 was US cents 4.7, compared to US cents 4.6 for the corresponding period last year. Dilutive earnings per ordinary share for the six month period ended 30 June 2008, adjusted for the significant impact of the conversion of preference shares in January 2008, was a very impressive US cents 4.7 as against US cents 3.6 for the same period last year.
Taking into account the current market conditions, the Group prudently managed its loans and advances growth to 10% (+$1.3bn) while enhancing its liquidity base through a 30% increase (+$3.2bn) in customers' deposits. The confidence reposed by the international financial community in AUB is also reflected in the rise in deposits from banks and financial institutions to $7.4bn. Non-trading investments were retained at $3.5bn. Through prudent balance sheet management within the Group's risk and liquidity frameworks, total assets grew by 17.4% to $27.0bn (31 December 2007: $23.0bn).
Overall, the Return on Average Assets for the first half of 2008 increased to 2.1% as compared to 1.7% for the corresponding period last year, contributing to a resultant annualised Return on Average Equity of 18.8% (YTD 30 June 2007: 17.7%).
"As the financial institutional community fully absorbs the ripple effects stemming from the sub-prime credit crisis, AUB's half year results are encouraging and are a testament to the effectiveness in implementing, in a prudent risk diversified manner, our core business strategy."
said Fahad Al- Rajaan, Chairman, AUB.
"Earlier this year AUB was the first ever recipient of AsiaMoney's 'Best Commercial Bank in Bahrain' award, which marked the bank's fourth major award for 2008. Global Finance accorded AUB with the award for 'Best Foreign Exchange Bank in the Middle East 2008'. Further Euromoney and Global Finance also recognised the bank's outstanding performance and its unique, integrated product offerings by conferring on AUB - 'Best Bank in Bahrain 2008' and 'Best Bank in the Middle East - 2008' respectively, thereby reinforcing the bank's leading position in the Middle East's banking sector," concluded Al- Rajaan.
Posted by Ehab Al-Abbadi
