NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY
Review report and interim condensed consolidated financial statements
For the period ended 30 September 2024
National Bank of Umm Al-Qaiwain (PSC) and Subsidiary
Review report and interim condensed consolidated financial statements
For the period ended 30 September 2024 (Unaudited)
Contents | Pages |
Report on review of interim condensed consolidated financial statements | 3 |
Interim condensed consolidated statement of financial position | 4 |
Interim condensed consolidated income statement | 5 |
Interim condensed consolidated statement of comprehensive income | 6 |
Interim condensed consolidated statement of changes in equity | 7 |
Interim condensed consolidated statement of cash flows | 9 |
Notes to the interim condensed consolidated financial statements | 10 - 27 |
Ernst & Young Middle East | Tel: | +971 6 574 1491 |
(Sharjah Branch) | Fax: | +971 4 332 4004 |
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Al-Ittihad Street, Emirate of Sharjah | ||
United Arab Emirates | PL No. 2845 |
REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS TO THE BOARD OF DIRECTORS OF NATIONAL BANK OF UMM AL- QAIWAIN PSC
Introduction
We have reviewed the accompanying interim condensed consolidated financial statements of National Bank of Umm Al-Qaiwain PSC (the "Bank") and its subsidiary (collectively referred to as the "Group"), as at 30 September 2024, which comprise the consolidated interim statement of financial position as at 30 September 2024 and the related consolidated interim income statement, consolidated interim statement of comprehensive income for the three-month and nine-month period then ended, and consolidated interim statement of changes in equity and consolidated interim statement of cash flows for the nine-month period then ended and explanatory notes.
Management is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with International Financial Reporting Standard IAS 34, Interim Financial Reporting ("IAS 34"). Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial statements are not prepared, in all material respects, in accordance with IAS 34.
For Ernst & Young
Ali Eltilib
Partner
Registration No: 1118
17 October 2024
Sharjah, United Arab Emirates
A member firm of Ernst & Young Global Limited
National Bank of Umm Al-Qaiwain (PSC) and Subsidiary
INTERIM CONDENSED CONSOLIDATED INCOME STATEMENT
For the period ended 30 September 2024 (Unaudited)
Three months period ended | Nine months period ended | ||||
30 September (Unaudited) | 30 September (Unaudited) | ||||
────────────────── | ────────────────── | ||||
2024 | 2023 | 2024 | 2023 | ||
Notes | AED '000 | AED '000 | AED '000 | AED '000 | |
Interest income | 224,131 | 196,230 | 672,407 | 546,719 | |
Income from Islamic financing products | 2,559 | 3,368 | 8,406 | 10,739 | |
──────── | ──────── | ──────── | ──────── | ||
Total interest income and income from | |||||
Islamic financing products | 226,690 | 199,598 | 680,813 | 557,458 | |
Interest expense | (69,571) | (42,654) | (186,969) | (109,827) | |
Distribution to depositors - Islamic products | (15) | (13) | (42) | (192) | |
──────── | ──────── | ──────── | ──────── | ||
Net interest income and income from | |||||
Islamic products net of distribution to depositors | 157,104 | 156,931 | 493,802 | 447,439 | |
Net fees and commission income | 7,156 | 5,954 | 21,824 | 21,628 | |
Other operating income | 7,706 | 53,992 | 81,695 | 75,372 | |
──────── | ──────── | ──────── | ──────── | ||
GROSS INCOME | 171,966 | 216,877 | 597,321 | 544,439 | |
Operating expenses | (44,666) | (46,287) | (129,742) | (123,351) | |
Investment gains | 2,796 | 3,164 | 53,547 | 50,062 | |
──────── | ──────── | ──────── | ──────── | ||
OPERATING INCOME | 130,096 | 173,754 | 521,126 | 471,150 | |
Net impairment losses | 16 | (4,248) | (43,417) | (86,982) | (85,690) |
──────── | ──────── | ──────── | ──────── | ||
Profit before tax | 125,848 | 130,337 | 434,144 | 385,460 | |
Income tax expense | 17 | (11,290) | - | (34,221) | - |
──────── | ──────── | ──────── | ──────── | ||
PROFIT FOR THE PERIOD | 114,558 | 130,337 | 399,923 | 385,460 | |
════════ | ════════ | ════════ | ════════ | ||
Basic and diluted earnings | |||||
per share (AED) | 18 | 0.06 | 0.07 | 0.20 | 0.19 |
════════ | ════════ | ════════ | ════════ |
The attached notes 1 to 26 form an integral part of these interim condensed consolidated financial statements.
The independent auditor's report on review of the interim condensed consolidated financial statements is set out on page 3.
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National Bank of Umm Al-Qaiwain (PSC) and Subsidiary
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 30 September 2024 (Unaudited)
Three months period ended | Nine months period ended | |||
30 September (Unaudited) | 30 September (Unaudited) | |||
────────────────── | ────────────────── | |||
2024 | 2023 | 2024 | 2023 | |
AED '000 | AED '000 | AED '000 | AED '000 | |
PROFIT FOR THE PERIOD | 114,558 | 130,337 | 399,923 | 385,460 |
──────── | ──────── | ──────── | ──────── | |
Other comprehensive income | ||||
Items that will not be reclassified | ||||
subsequently to income statement | ||||
Net fair value gain on investment securities | ||||
carried at FVOCI - equity | 76,045 | 40,350 | 81,952 | 24,357 |
Related tax on other comprehensive income | (7,256) | - | (7,256) | - |
──────── | ──────── | ──────── | ──────── | |
Other comprehensive income | ||||
for the period | 68,789 | 40,350 | 74,696 | 24,357 |
──────── | ──────── | ──────── | ──────── | |
TOTAL COMPREHENSIVE INCOME | ||||
FOR THE PERIOD | 183,347 | 170,687 | 474,619 | 409,817 |
════════ | ════════ | ════════ | ════════ |
The attached notes 1 to 26 form an integral part of these interim condensed consolidated financial statements.
The independent auditor's report on review of the interim condensed consolidated financial statements is set out on page 3.
6
National Bank of Umm Al-Qaiwain (PSC) and Subsidiary
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 30 September 2024 (Unaudited)
Share | Impairment | Cumulative | |||||
change in | Statutory | General | Reserve - | change in | Retained | ||
capital | reserve | reserve | general | fair values | earnings | Total | |
AED '000 | AED '000 | AED '000 | AED '000 | AED '000 | AED '000 | AED '000 | |
Balance as at 1 January 2024 (audited) | 2,000,000 | 1,019,266 | 6,440 | 74,797 | 388,254 | 2,152,184 | 5,640,941 |
Profit for the period | - | - | - | - | - | 399,923 | 399,923 |
Other comprehensive income for the period | - | - | - | - | 74,696 | - | 74,696 |
──────── | ──────── | ──────── | ──────── | ──────── | ──────── | ──────── | |
Total comprehensive income for the period | - | - | - | - | 74,696 | 399,923 | 474,619 |
──────── | ──────── | ──────── | ──────── | ──────── | ──────── | ──────── | |
Additional provision under U.A.E Central Bank | |||||||
requirement over IFRS 9 requirement | - | - | - | 9,576 | - | (9,576) | - |
Sale of FVOCI equity | - | - | - | - | (12,636) | 12,516 | (120) |
Dividend paid (Note 13) | - | - | - | - | - | (300,000) | (300,000) |
──────── | ──────── | ──────── | ──────── | ──────── | ──────── | ──────── | |
Balance as at 30 September 2024 (unaudited) | 2,000,000 | 1,019,266 | 6,440 | 84,373 | 450,314 | 2,255,047 | 5,815,440 |
════════ | ════════ | ════════ | ════════ | ════════ | ════════ | ════════ |
The attached notes 1 to 26 form an integral part of these interim condensed consolidated financial statements.
The independent auditor's report on review of the interim condensed consolidated financial statements is set out on page 3.
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National Bank of Umm Al-Qaiwain (PSC) and Subsidiary
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 30 September 2024 (Unaudited)
Impairment | Cumulative | ||||||
Share | Statutory | General | reserve - | change in | Retained | ||
capital | reserve | reserve | general | fair values | earnings | Total | |
AED '000 | AED '000 | AED '000 | AED '000 | AED '000 | AED '000 | AED '000 | |
Balance as at 1 January 2023 (audited) | 2,000,000 | 1,019,266 | 6,440 | 34,586 | 383,710 | 1,883,018 | 5,327,020 |
Profit for the period | - | - | - | - | - | 385,460 | 385,460 |
Other comprehensive income for the period | - | - | - | - | 24,357 | - | 24,357 |
──────── | ──────── | ──────── | ──────── | ──────── | ──────── | ──────── | |
Total comprehensive income for the period | - | - | - | - | 24,357 | 385,460 | 409,817 |
──────── | ──────── | ──────── | ──────── | ──────── | ──────── | ──────── | |
Additional provision under U.A.E Central Bank | |||||||
requirement over IFRS 9 requirement | - | - | - | 34,806 | - | (34,806) | - |
Dividend paid (Note 13) | - | - | - | - | - | (200,000) | (200,000) |
──────── | ──────── | ──────── | ──────── | ──────── | ──────── | ──────── | |
Balance as at 30 September 2023 (unaudited) | 2,000,000 | 1,019,266 | 6,440 | 69,392 | 408,067 | 2,033,672 | 5,536,837 |
════════ | ════════ | ════════ | ════════ | ════════ | ════════ | ════════ |
The attached notes 1 to 26 form an integral part of these interim condensed consolidated financial statements.
The independent auditor's report on review of the interim condensed consolidated financial statements is set out on page 3.
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National Bank of Umm Al-Qaiwain (PSC) and Subsidiary
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 30 September 2024 (Unaudited)
Nine months period ended | |||
30 September (Unaudited) | |||
────────────────────── | |||
2024 | 2023 | ||
Notes | AED '000 | AED '000 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Profit before tax | 434,144 | 385,460 | |
Adjustments for: | |||
Provision for expected credit losses | 16 | 76,628 | 85,690 |
Depreciation of property and equipment | 9,279 | 10,547 | |
Depreciation of right of use asset | 1,336 | 1,296 | |
Provision for impairment of assets acquired in settlement of debt | 16 | 10,354 | - |
Provision for employee end of service benefits | 3,000 | 2,229 | |
Decrease/(Increase) in fair value of investment in securities at FVTPL | 2,842 | (7,876) | |
Premium amortised on investment securities | (2,110) | (1,094) | |
Dividend income | 23 | (54,340) | (40,747) |
Profit on disposal of property and equipment | (3,849) | (10) | |
Gain on disposal of assets acquired in settlement of debt | (4,112) | (18,796) | |
Share of loss from an associate | 74 | 168 | |
Finance cost on lease liability | 68 | 18 | |
──────── | ──────── | ||
Operating cash flows before movements in working capital | 473,314 | 416,885 | |
(Increase)/ Decrease in due from banks with original maturity | |||
greater than 3 months | (783,398) | 220,380 | |
Increase in statutory deposit with CBUAE | (147,995) | (175,990) | |
Payment of employee end of service benefits | (425) | (1,082) | |
Proceeds from disposal of assets acquired in settlement of debt | 7,870 | 110,356 | |
Increase in loans and advances and Islamic financing receivables | (349,417) | (308,453) | |
Increase in other assets | (28,638) | (43,296) | |
Increase in customers' deposits and Islamic customer deposits | 1,441,267 | 563,126 | |
Increase in other liabilities | 69,995 | 54,406 | |
──────── | ──────── | ||
Net cash generated from operating activities | 682,573 | 836,332 | |
──────── | ──────── | ||
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchase of property and equipment | (21,299) | (12,775) | |
Proceeds from disposal of property and equipment | 17,516 | 14 | |
Purchase of investment securities | (189,700) | (176,258) | |
Proceeds from maturity and disposal of investment securities | 114,896 | 97,223 | |
Dividend received from investment securities | 54,340 | 40,747 | |
──────── | ──────── | ||
Net cash used in investing activities | (24,247) | (51,049) | |
──────── | ──────── | ||
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Dividends paid | 13 | (300,000) | (200,000) |
Lease payments | (1,477) | (452) | |
──────── | ──────── | ||
Net cash used in financing activities | (301,477) | (200,452) | |
──────── | ──────── | ||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 356,849 | 584,831 | |
Cash and cash equivalents at the beginning of the period | 3,927,853 | 3,999,860 | |
──────── | ──────── | ||
CASH AND CASH EQUIVALENTS AT THE END | |||
OF THE PERIOD | 19 | 4,284,702 | 4,584,691 |
════════ | ════════ |
The attached notes 1 to 26 form an integral part of these interim condensed consolidated financial statements.
The independent auditor's report on review of the interim condensed consolidated financial statements is set out on page 3.
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National Bank of Umm Al-Qaiwain (PSC) and Subsidiary
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the period ended 30 September 2024 (Unaudited)
1 GENERAL INFORMATION
National Bank of Umm Al-Qaiwain (PSC) (the "Bank") is a Public Shareholding Company incorporated in the Emirate of Umm Al-Qaiwain ("UAQ") in the United Arab Emirates ("U.A.E.") by Amiri Decree Number (1) on 5 January 1982, issued by His Highness, the Ruler of Umm Al-Qaiwain, and commenced its operations with effect from 1 August 1982. National Bank of Umm Al-Qaiwain (PSC), and its subsidiary, Twin Towns Marketing Management L.L.C. are together referred to as the "Group". The address of the Bank's registered Head Office is P.O. Box 800, Umm Al-Qaiwain, United Arab Emirates.
The Bank is engaged in providing retail and corporate banking services through a network of 11 branches in the U.A.E. The Group carries out Islamic banking operations through Islamic banking window established in 2005 across all its branch network.
The interim condensed consolidated financial statements of the Group for the nine months period ended 30 September 2024 were authorised and approved for issue by the Board of Directors on 17 October 2024 by circulation.
2 SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION
2.1 BASIS OF PREPARATION
These interim condensed consolidated financial statements are prepared in accordance with International Accounting Standard No. 34 - Interim Financial Reporting issued by the International Accounting Standard Board and also comply with the applicable requirements of the laws in the U.A.E.
The interim condensed consolidated financial statements are prepared in accordance with the historical cost basis, except for the revaluation of certain financial instruments.
The interim condensed consolidated financial statements are presented in U.A.E. Dirhams (AED) as that is the functional currency in which the majority of the Group's transactions are denominated. All financial information presented in AED has been rounded off to the nearest thousand, unless otherwise stated.
These interim condensed consolidated financial statements do not include all the information required for full annual consolidated financial statements and should be read in conjunction with the Group's annual audited consolidated financial statements as at and for the year ended 31 December 2023. In addition, results for the interim periods ended 30 September 2024 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2024.
2.2 BASIS OF CONSOLIDATION
The interim condensed consolidated financial statements comprise the financial statements of the Bank and of the subsidiary as disclosed in Note 1. The financial year end for the subsidiary is the same as that of the Bank.
2.3 MATERIAL ACCOUNTING POLICY INFORMATION
The accounting policies applied by the Group in the preparation of the interim condensed consolidated financial statements are consistent with those applied by the Group in the annual consolidated financial statements for the year ended 31 December 2023, except for changes in accounting policies explained in Note 3.
2.4 KEY ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the interim condensed consolidated financial information requires management to make estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Such estimates are necessarily based on assumptions about several factors involving varying degrees of judgment and uncertainty, and actual results may therefore differ resulting in future changes in these estimates. In preparing, the interim condensed consolidated financial information, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation and uncertainty were the same as those that applied to the audited consolidated financial statements as at and for the year ended 31 December 2023.
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