United Arab Bank (UAB) posted a net profit of AED255 million ($69 million) for the full year ending December 31, 2023, compared to a net profit of AED155 million in 2022, an increase of 65%, a report said.

The profit growth is as a result of improved operating performance and lower expected credit losses, coupled with disciplined cost management, Emirates News Agency, WAM, said, citing a statement from UAB.

UAB’s financial performance was aided by significant progress across the core businesses with total operating income recording a 15% growth in FY 2023 as compared to FY 2022 and is expected to improve further with new portfolio underwritings in quality assets.

Total assets grew 25% year-on-year in FY 2023 to AED17.6 billion, driven by the strong growth in loans, advances, and Islamic financing (+23% year-on-year) and the investment portfolio (+31% year-on-year).

Augmented by the Additional Tier 1 capital issuance of $150 million during Q1 2023, the bank maintains a solid capital adequacy ratio of 19.0% and a CET1 ratio of 13.5%, which remain well above the regulatory requirements, supporting credit growth ahead.

NPL ratio notably improved from 8.2% in FY2022 to 5.0% in FY2023.

The bank said it will continue to focus on growing its core businesses and revenues across its wholesale banking, retail banking, and Treasury and capital markets segments.

Sheikh Faisal bin Sultan bin Salem Al Qassimi, Chairman of the Board of Directors at UAB, said: “I am delighted to announce that we have recorded another year of remarkable growth in net profits, driven by relentless and disciplined execution of the new strategy.

Shirish Bhide, CEO of UAB, said: “Our customer-centric approach and prudent policies led to a 15% increase in revenues and a 65% surge in profits.”

“UAB has significantly improved its asset quality, having more than halved the NPL ratio to 5.0% in 2023 from 11.6% just two years ago,” he said.

“The balance sheet was further strengthened by raising $150 million of Additional Tier 1 capital and a two-year AED735 million medium-term borrowing at market competitive rates. In addition to onboarding new clients and launching new products, UAB also saw an increase in CASA deposits and improved client connectivity," he added.