United Gulf Bank (UGB) has reported a sharp drop in net profits in the first half of 1994, as the Bahrain-based offshore investment bank faced up to the downturn in global bond and equity markets. Net profit fell to $4.68 million in January-June 1994, from $8.65 million in the first half of 1993.

The bank's net profit is equivalent to a return on assets of 1.34 per cent, UGB said on 29 August. 'Due to a prudent policy of developing a well diversified asset mix, including real estate investment and a balanced investment portfolio, the impact of the heavy drop in the bond markets has been well contained,' the bank said.

UGB anticipates better performance in the next six months. 'With the recovery in both the bond and equity market which has already set in, the results in the second half of the year are expected to be much better,' the bank said.