NUMBERSTALK 9Annual Report 2019 BAHRAIN KUWAIT UAE UK EGYPT IRAQ OMAN 9LIBYA Constantly striving to provide greater levels of shareholder and customer satisfaction by delivering ever higher 9standards of performance % increase in Total Assets to US$ 40.3 billion 13.4 compared to 2018 % increase in Net Profit to US$ 730.5 million 4.7 compared to 2018 % increase in Shareholders’ Equity to US$ 4.3 billion 9.1 compared to 2018 Ahli United Bank Annual Report 2019 02 CONTENT 04 06 GROUP MISSION STATEMENT AUB OPERATING DIVISIONS 08 16 18 FINANCIAL HIGHLIGHTS BOARD OF DIRECTORS’ REPORT BOARD OF DIRECTORS 22 24 27 CHAIRMAN’S STATEMENT GROUP CHIEF EXECUTIVE OFFICER & CORPORATE GOVERNANCE MANAGING DIRECTOR’S STATEMENT 48 55 56 GROUP BUSINESS AND RISK REVIEW GROUP MANAGEMENT GROUP MANAGEMENT ORGANIZATION STRUCTURE 59 61 131 CONTACT DETAILS CONSOLIDATED FINANCIAL PILLAR III DISCLOSURES - BASEL III STATEMENTS Ahli United Bank Annual Report 2019 03 Group Mission Statement To create an unrivalled ability to meet customer needs, provide fulfilment and development for our staff and deliver outstanding shareholder value. Ahli United Bank Annual Report 2019 04 OBJECTIVES AUB VISION & STRATEGY • to maximise shareholder value on a sustainable basis. • Develop an integrated pan regional financial services • to maintain the highest international standards of corporate group model centered on commercial and retail banking, governance and regulatory compliance. private banking, asset management and life insurance with an enhanced Shari’a compliant business contribution. • to maintain solid capital adequacy and liquidity ratios. • Acquire banks and related regulated financial institutions in • to entrench a disciplined risk and cost management the Gulf countries (core markets) with minimum targeted culture. 10% market share to be achieved through mergers, • to develop a cross-cultural meritocratic management acquisitions and organic growth. structure. • Acquire complementary banking platforms in secondary • to optimise staff development through business driven markets enjoying strong cross border business flows with training and profit related incentive. Gulf countries or with economic structures similar to the • to contribute to the social and economic advancement Gulf countries. of the communities in which the Group operates. 730,501 US$’000 +4.7% increase in Net Profit for 2019 Ahli United Bank Annual Report 2019 05 AUB Operating Divisions CORPORATE BANKING TREASURY AND INVESTMENTS This division covers all the Bank’s capital-intensive This division provides money market, trading and treasury activities in risk asset generation and funding regionally services and is also responsible for the management of the and internationally. Group’s funding. • Corporate and Trade Finance • Money Market Services • Commercial Property Finance • Foreign Exchange Services • Residential Property Finance • Hedging and Trading Solutions • Acquisition and Structured Finance • Structured Products • Correspondent Banking • Investment Management • Shari’a Compliant Banking • Shari’a Compliant Treasury Products PRIVATE BANKING & WEALTH MANAGEMENT RISK MANAGEMENT This division generally includes all the low capital-intensive This division is responsible for the identification, assessment sectors of the business, offering wealth management and ongoing control of all material risks that could affect the services to individuals and institutions based on performance Group’s business & operations. and a balanced product mix. • Risk Management • Private Banking and Asset Management • Legal • Real Estate Fund Management • Compliance • Shari’a Compliant Banking AUDIT RETAIL BANKING This division is an integral part of the control environment This division covers both conventional and Shari’a Compliant of the Group. The role of audit is to understand the key individual customers’ deposits, loans, overdrafts, credit cards risks of the Bank and examine and evaluate the adequacy and residential mortgages. and effectiveness of the system of risk management and internal control in order to identify legal, regulatory or policy shortcomings. SUPPORT SERVICES These divisions provide back end banking services to support ongoing business activities of the Group, as well as supporting the Group’s expansion through mergers and acquisitions. • Finance • Strategic Development • Information Technology • Operations • Services • Human Resources Ahli United Bank Annual Report 2019 06 Ahli United Bank Annual Report 2019 07 Financial Highlights 8Countries 148Branches 4,071Employees NET PROFIT US$’000s TOTAL ASSETS US$’000s 730,501 40,280,051 LOANS AND ADVANCES US$’000s SHAREHOLDERS’ EQUITY US$’000s 20,742,360 4,265,527 Ahli United Bank Annual Report 2019 08 Financial Highlights continued Ownership in Group Entities AUB United Kingdom 100% CBIQ Iraq UBCI 75% Libya AUB 40% Egypt 85.5% AUB Bahrain AUB 100% Kuwait AUB (DIFC) UAE 74.9% 100% Ahli United Bank is well on course to achieving its growth and regional expansion Ahli Bank objectives through the Oman combined resources of 35% experienced staff, solid capital and advanced technologies Ahli United Bank Annual Report 2019 09 Financial Highlights continued NET PROFIT US$’000s 730,501 2019 730,501 2018 697,534 2017 618,715 2016 570,640 2015 537,248 2014 482,529 TOTAL ASSETS US$’000s 40,280,051 2019 40,280,051 2018 35,507,577 2017 33,241,885 2016 31,322,484 2015 33,965,317 2014 33,444,888 Ahli United Bank Annual Report 2019 10 Financial Highlights continued LOANS AND ADVANCES US$’000s 20,742,360 2019 20,742,360 2018 19,503,961 2017 19,498,702 2016 18,606,883 2015 19,353,181 2014 18,464,536 SHAREHOLDERS’ EQUITY US$’000s 4,265,527 2019 4,265,527 2018 3,908,701 2017 3,815,622 2016 3,500,827 2015 3,517,737 2014 3,390,874 40,280,051 US$’000 +13.4% increase in Total Assets for 2019 Ahli United Bank Annual Report 2019 11 Financial Highlights continued AHLI UNITED BANK B.S.C. US $ ‘000s Dec 19 Dec 18 Dec 17 Dec 16 Dec 15 Dec 14 Net profit* 730,501 697,534 618,715 570,640 537,248 482,529 Total assets 40,280,051 35,507,577 33,241,885 31,322,484 33,965,317 33,444,888 Loans and advances 20,742,360 19,503,961 19,498,702 18,606,883 19,353,181 18,464,536 Total liabilities 34,918,522 30,535,569 28,353,731 26,782,982 29,605,103 29,614,669 Shareholders’ equity 4,265,527 3,908,701 3,815,622 3,500,827 3,517,737 3,390,874 Non-controlling interest 496,002 463,307 472,532 438,675 442,477 439,345 Return on average assets (ROAA) 2.1% 2.2% 2.1% 1.8% 1.7% 1.6% Return on average equity (ROAE) 17.7% 18.1% 16.5% 15.6% 15.6% 15.2% Cost to income ratio 28.6% 27.1% 28.8% 27.6% 28.3% 29.2% Financial leverage 7.3 7.0 6.6 6.8 7.5 7.7 Risk assets ratio** 16.4% 16.9% 17.0% 17.1% 16.7% 15.5% Net interest margin 2.62% 2.88% 2.79% 2.56% 2.54% 2.40% Earnings per share (US cents) 7.9 7.6 6.7 6.3 6.1 5.7 * Attributable to Bank’s equity shareholders ** Under BASEL III from 2015 PRINCIPAL SUBSIDIARIES KUWAIT: AHLI UNITED BANK K.S.C.P. KD ‘000s Dec 19 Dec 18 Dec 17 Dec 16 Dec 15 Dec 14 Net profit* 55,017 51,255 44,463 40,348 42,805 47,008 Total assets 4,351,404 3,913,653 3,665,579 3,692,161 3,904,303 3,596,928 Financing receivables 3,018,755 2,799,906 2,672,832 2,706,054 2,680,334 2,480,431 Total liabilities 3,835,246 3,422,251 3,197,991 3,246,473 3,543,468 3,257,608 Shareholders’ equity 455,518 430,762 406,948 385,048 356,158 326,868 Non-controlling interest - - - - 4,677 12,452 Return on average assets 1.4% 1.4% 1.2% 1.0% 1.2% 1.4% Return on average equity 12.7% 12.4% 11.4% 11.0% 12.7% 15.1% Cost to income ratio 37.3% 30.6% 32.0% 30.5% 29.9% 32.1% Financial leverage 8.4 7.9 7.9 8.4 9.8 9.6 Risk assets ratio** 16.0% 16.6% 18.0% 18.2% 15.5% 16.3% Earnings per share (KD - fils) 27.8 25.8 22.1 21.7 23.1 25.3 * Attributable to Bank’s equity shareholders ** Under BASEL III Ahli United Bank Annual Report 2019 12 Financial Highlights continued PRINCIPAL SUBSIDIARIES UNITED KINGDOM: AHLI UNITED BANK (UK) PLC US $ ‘000s Dec 19 Dec 18 Dec 17 Dec 16 Dec 15 Dec 14 Net profit 40,814 35,185 39,102 32,782 40,328 49,028 Total assets 3,210,261 2,909,856 2,785,254 2,580,972 2,723,683 3,671,428 Loans and advances 1,670,090 1,451,715 1,370,409 1,170,198 1,292,433 1,414,732 Total liabilities 2,911,244 2,621,474 2,493,406 2,288,573 2,421,215 3,376,748 Shareholders’ equity 299,017 288,382 291,848 292,399 302,468 294,680 Return on average assets 1.4% 1.2% 1.5% 1.2% 1.3% 1.3% Return on average equity 14.4% 12.8% 13.8% 11.3% 13.9% 16.6% Cost to income ratio 35.3% 44.7% 39.0% 40.9% 42.4% 36.6% Financial leverage 9.7 9.1 8.5 7.8 8.0 11.5 Risk assets ratio* 20.4% 23.6% 24.0% 25.7% 27.4% 19.5% Earnings per share (US - cents) 20.4 17.6 19.5 16.4 20.2 24.5 * Under BASEL III from 2015 PRINCIPAL SUBSIDIARIES IRAQ: COMMERCIAL BANK OF IRAQ P.S.C.