United Gulf Bank (UGB) yesterday posted a first half net profit of $13.3 million compared with $31.8 million a year ago.

UGB is the asset management and investment platform of Kipco Group.

Total income during the first half decreased to $63.5 million from $72.5 million and earnings per share fell to 1.62 cents from 3.88 cents.

Total assets were $1.78 billion compared with $1.82 billion in the same period last year.

UGB's total income was $37.2 million for the second quarter compared with $44.9 million in the same period in 2010.

Net profit for the period decreased by 65pc to $8.5 million compared with the three months ended June 30, 2011.

In 2010, UGB recorded a gain of $43.8 million on the sale of Tunis International Bank.

Excluding the gain, UGB recorded a substantial increase in net profit in the second quarter of 2011 compared to the same period last year.

UGB's total assets stood at $1.78 billion, a decrease from $1.92 billion at the year end.

The decrease in assets is a result of UGB's strategy to reduce its non-core assets including some real estate holdings. During the second quarter, UGB raised a total of $312 million in medium-term funding and repaid a $115 million club loan.

UGB's financial services company, Kamco, also raised $43 million net in medium-term funds and repaid $71 million of bonds in the quarter. UGB's assets under management at the end of the second quarter were $7.5 billion compared to $7.6 billion the previous quarter.

"During the second quarter, UGB raised a total of $312 million in medium-term funding," said bank chairman Masaud Hayat.

"The ability to raise this level of funding reflects our solid reputation amongst the financial community. These funds have strengthened our balance sheet and allowed us far greater financial flexibility as we move forward.

"This strong liquidity and healthy capital position combined with our conservative asset valuations provide a very strong base for UGB's growth potential," he added. - TradeArabia News Service