United Gulf Bank (UGB), the investment banking platform of the Kipco Group, has posted a net profit of $16.5 million for the first half of this year, marking a 24 per cent rise over $13.3 million registered in same period last year.

UGB recorded a total income of $60.3 million for the first half of 2012 compared with $63.5 million for the six months ended June 30, 2011.

Fees and commission income contributed $11.5 million for the first half of 2012 compared with $9.5 million in the same period last year.

Contributions from associates increased to $21.6 million in the first half of this year, compared with $11.5 million in the same period last year. This was due to improved results of commercial banking and real estate associates.

Investment income reduced to $24.1 million in the first six months of 2012, compared with $38.5 million in first half of 2011 due to deleveraging and exits of non-trading investments.

UGB's net profit for the second quarter of 2012 decreased by 13.4pc to $7.3 million compared with $8.5 million for the same period last year.

UGB's total assets stood at $1.44 billion as of June 30, 2012, a decrease from $1.77bn as of December 31, 2011. The decrease in assets is part of UGB's strategy to reduce its non-core assets including some real estate holdings.

During the second quarter of this year, UGB repaid a total of $268 million of loans from internally generated funds.

So far this year, UGB has reduced its current debt with loan repayments totalling $296 million. UGB's assets under management on June 30, 2012, were $7.6 billion, compared with $7.1 billion on December 30, 2011.

"These results demonstrate the strength of UGB's underlying core assets which are performing to our expectations," chairman Masaud Hayat said.

"During the quarter, we also paid off another significant proportion of our debt from our own funds.

"Looking forward, we will continue to maintain a high level of capital and a strong liquidity position," he said. "In line with our business strategy, we will also continue to deleverage our balance sheet, while investing in our core activities and markets," he added. – TradeArabia News Service