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"The period saw the culmination of our strategy to focus UGB on its core areas of expertise: asset management and investment banking. We have now completed the transfer of UGB's four commercial banking assets to our sister company, Burgan Bank, following the sale of our stake in Tunis International Bank in June. Although global and regional markets continue to be volatile and will likely remain the case for at least the medium term, we believe our conservative management of our business, combined with its strategic realignment as Kipco's asset management and investment banking business, will enable us to capture the value that the region's markets offer."
Financial Performance
UGB delivered a solid financial performance in the first six months of the year despite the continued volatility of global and regional markets. Income before interest and other expenses increased by 10% to $72.5m from $65.9m in the same period for 2009. Net profit for the six months to 30 June 2010 increased by 114% to $31.8m compared to the six months ended 30 June 2009, with earnings per share increasing to 3.88c from 1.82c in 2009. UGB recorded a net profit of $24.3m for the 2Q10, however, excluding the gain on transfer of Tunis International Bank, a loss of approximately $20m was sustained. This loss was largely attributable to the company's trading portfolio following the downturn in global and regional markets during the second quarter of 2010.
Total assets decreased to $1.8bn from $2.5bn in the first half of 2009, mainly reflecting the disposal of UGB's stake in Tunis International Bank. UGB retains a strong balance sheet with a capital adequacy ratio of 18%, well above the Central Bank of Bahrain's minimum level of 12.5%.
Assets under management were $7.1bn as at 30 June 2010, compared to $8.5bn for the first six months of 2009, reflecting the continuing challenging environment for global and regional financial markets. On a quarterly basis, assets under management remained flat, with $7.2bn recorded as at 31 March 2010.
David Rhodes, Chief Executive Officer, UGB, commented, "Our business has made significant progress both financially and strategically during the first half of the year. Although the market remains uncertain, we are seeing positive signs of improvement across our business and we continue to manage the business prudently. With the sale of our stake in Tunis International Bank, UGB is now completely focused on its core activities of asset management and investment banking and on becoming a leading asset management and investment banking institution in the Mena region. We see significant opportunity for the business over the long term as the region continues to develop economically, financially and socially."
Posted by Siba Sami Ammari
