Annual Report - Ahli United Bank

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Annual Report - Ahli United Bank

Group Business& Risk Review (Contd.)RESIDENTIAL LENDINGMarket conditions remained difficult for most of 2009 with a continued low level of mortgage transactions recorded. The businessenvironment was further undermined by the contraction in lending activities by the major banks. Together with a lack of quality stockavailable, particularly in Central London, many Gulf based clients were unable to source desirable property at an appropriate price.The strategic focus for Residential Lending remained constant in striving to add quality mortgage business to current portfolios, maximisingreturns to the Bank while minimising any downside. The highest standards of performance were evident in managing the surge in newbusiness towards the end of the year, positioning Residential Lending as the largest asset class in AUB (U.K.). The existing product range,although constantly monitored, continued to attract business at the required level.2010 is expected to present new challenges, mainly arising from pressure on pricing as competition increases from banks returning to themarket. In achieving asset targets, we shall continue to focus on meeting the needs of intermediary introducers as well as supporting theprivate banking teams throughout the Gulf who have facilitated our commitment to increase business levels for Islamic based transactions,in line with Group policy.COMMERCIAL FINANCEThe year began with poor trading prospects for borrowers, overshadowed by the threat of increasing defaults and concerns over liquidity.Banks moved swiftly to address the issues arising, taking a firm stance on restructuring negotiations. In the latter half of 2009 debt marketsrecovered strongly ending the year with pricing on the secondary market 30% higher than 2008.At AUBUK underperforming loans were restructured successfully, improving risk profiles and increasing returns. During the second halfof the year our focus was directed on growing an investment grade bond portfolio providing relatively low risk income in the mediumterm. The annualised NIM made a material contribution to AUBUK earnings and, together with fee income and new business targets,exceeded budget.Going forward, the commercial finance portfolio will continue to be monitored closely whilst building the investment grade bond portfolio,with selective lending to deleveraged sub investment private equity backed borrowers.2.52.01.51.00.50.0RETURN ON AVERAGE ASSETS2.1 %1.7 % 1.7 %1.3 %0.9 %2005 2006 2007 2008 2009INFORMATION TECHNOLOGYThe Information Technology (IT) division aligns its target application systems andinfrastructure architecture with the Group’s business strategies to deliver efficient andeffective solutions together with a secure and robust operational platform that providesthe highest standards of customer service, business support and information security.During 2009 significant progress was achieved in meeting this key objective.Ahli United Bank’s commitment to offer its retail customers maximum flexibilityin accessing banking services was further enhanced with the introduction of SMSbanking at Ahli Bank Qatar and at Ahli Bank Oman which was also added to theretail internet banking system. These facilities, aligned with the MyGlobal Statementproduct, provide customers with integrated access to banking services across theAUB Group. In addition, the system supporting My Hassad deposit certificate wasalso upgraded to provide additional rewards for customer loyalty.34 AUB Annual Report 2009

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