ICEC

UGB registered US$ 1.5 million in net profit for 2011

United Gulf Bank (UGB) achieved a net profit of US$1.5 million for 2011 (for the12 months ended 31 December, 2011), a fall of 96% over the US$ 38.7 million in 2010, with a similar decrease in basic earnings per share to 0.18 cents from 4.71 cents in 2010.

UGB explained that the decrease in net profit in 2011 was due to reduced investment fees, commission income and investment impairment provisions. However, this fall was offset by an almost nine fold increase in UGB’s share of profits from its commercial banking associates. UGB also reduced its expenses during the year. UGB’s total assets at the end of 2011 were US$1.78 billion, down from US$ 1.92 billion in 2010, reflecting management efforts to deleverage the bank during 2011, Zawya reported. UGB retains a strong balance sheet with total equity of US$ 603.2 million (2010: US$ 600.8 million) and a capital adequacy ratio of 18%, well above the Central Bank of Bahrain’s minimum level of 12.5%. In order to maintain healthy capital, liquidity and retain resources for future growth, UGB’s Board of Directors has decided to recommend no shareholder dividend for 2011.

According to Zawya, Mr Masaud Hayat, UGB’s Chairman, said: ”Overall, 2011 was a difficult year for UGB with economic uncertainty across the region. As a result, regional stock markets and asset values recorded negative returns. This situation had an impact on our results, but this was partly offset by a major increase in our share of profits from our commercial banking associates. This bodes well for the next 12 months and shows the resilience of our investment portfolio. In 2011, our focus was to manage the liquidity and strengthen our capital position – both of which we achieved. Even though our profitability was significantly lower in 2011 compared to 2010, we believe UGB is well positioned to capture any upturn in the market in 2012.”

Amwal Al Ghad

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