Al Ahli and AUB make marriage work
Whilst other regional banks just go on talking about the merits of consolidation, recently-formed United Bank of Kuwait is making it a success.
Merging seems to have paid off for United Bank of Kuwait and Bahrain’s Al Ahli Commercial Bank. Ahli United Bank, the new entity formed from their marriage last year, posted net profits of US $40.1 million for 2000, 18% up on the two banks’ combined profits in 1999 of US $34 million.
Total assets grew 5% to reach US $3,512.4 million and operating costs were reduced 11.4% to US $68.7 million. As a result, the bank’s costs to income ratio improved to 50.2% compared to 54.9% in 1999. A dividend of 2.5 cents per share was to be recommended to shareholders at a March 31 meeting.
The need for regional banks to merge and consolidate is currently a topic of much debate across the region, but Al Ahli and United Bank of Kuwait are amongst the first to have done it successfully, let alone do it at all. The new merged entity isn’t standing still either – it’s announced that it’s also taken a 15% stake in Bank of Kuwait & The Middle East.
“This major investment comes just a few months after AUB’s start of operations and clearly underscores our seriousness and commitment to the expansion of our businesses in the GCC countries,” said Fahad Al Rajaan, deputy chairman, Ahli United Bank. The transaction was valued at US $132.8 million.