The London-based UBAF Bank announced improved profits for 1994, boosted by released funds from its general provisions. Net income rose almost 12 per cent to £20.9 million ($32.7 million).

The bank has also released figures for the first quarter of 1995, showing pretax profits up almost 20 per cent at £4.3 million ($6.9 million), compared with the corresponding period last year.

The bank has proposed an increased dividend for 1994 at £10 million ($15.6 million), up from £5 million ($7.8 million) last year. The dividend comprises £6 million ($9.4 million) from profits and £4 million ($6.3 million) released from provisions.

Crispian Denby, chief financial officer, says the released funds from general provisions reflects the bank's successful strategy in dealing with its portfolio of problem loans. 'We hope there will be more scope for release in 1995,' he says.

Despite releasing £4 million to profit, the bank's general provision is slightly up this year at £21 million ($32.8 million) compared with 1993. The bank says it now has a cover ratio of 80 per cent against remaining problem sovereign loans.

The bank's loans and advances to banks grew by almost 50 per cent in 1994 to reach £411 million ($642 million) at the end of 1994, mainly made up of short-term placements. Loans and advances to customers rose by almost 18 per cent to £275 million ($430 million).

However, debt securities held mainly for liquidity purposes declined by about 39 per cent to £178 million ($278 million). This reflects the tighter spreads and narrower yields of 1994 compared to a year earlier, and the bank's decision to reduce its holdings accordingly.

'We will continue to develop our relationships with the Arab world in 1995, especially the east Mediterranean and Maghreb,'

says Denby. Last year, the bank opened a Middle East representative office in Beirut, and has also increased its activity in Morocco and Tunisia.