MANAMA: Arab Banking Corporation (ABC) yesterday recorded consolidated group net profit of $239 million for last year, a 17 per cent increase when compared with $205m for 2012.
The board of directors recommend a cash dividend of 5pc of the issued share capital ($0.05 per share), amounting to $155,500,000, for approval by the shareholders at the Annual General Meeting to be held on March 23.
ABC's total operating income rose to $857m from $816m in the previous year despite the adverse impact from the stronger dollar on consolidation of revenues from subsidiaries.
Year-on-year revenue growth was recorded by product segments across all geographies.
Operating expenses increased by $37m to $440m, mainly due to one-off restructuring costs during the first half of the year.
This resulted in a small, temporary increase in the cost to income ratio of 51.3pc compared with 49.4pc in 2012.
Operating profit before impairment provisions reached $417m (2012: $413m).
Net impairment provision charge of $49m was $13m lower than in the previous year due to recoveries and write-backs.
After tax charge and share of minority interests, net profit for the year amounted to $239m. Net profit for the fourth quarter was $61m compared with $47m in the previous year.
Total assets grew by $2 billion to reach $26.5bn. The increase was largely in marketable securities and other short-term, liquid assets. Loans and advances also rose by $0.8bn to $13.7bn. Robust risk management ensured that the ratio of NPLs (non-performing loans) to gross loans declined to 3pc from 3.2pc in 2012.
Deposits continued to grow during the year from $17.2bn at 2012 year-end to $18.3bn. Term financing increased by the second $1bn drawn in July 2013 from the $2bn five-year medium term facility arranged in 2012 to enhance the funding and liquidity position.
Liquidity continues to be at comfortable levels with the liquid assets to deposits ratio at 63pc.
Shareholders' equity at the end of last year stood at $3,940m compared with $3,778m at the end of 2012.
ABC Group's capital adequacy ratio at the end of last year was very strong at 22.3pc, predominantly Tier 1, which stood at 17.9pc.
"I am delighted at the results which show a very healthy increase in profits for the fifth consecutive year demonstrating the strength of ABC Group and its ability to overcome the impact of turbulent events in the core markets it serves," ABC chairman Saddek El Kaber said.
"I have every confidence that, with the continued support of shareholders and clients, ABC will grow and transform itself into a leading universal bank in Mena region."
ABC is a leading player in the region's banking industry and provides innovative wholesale financial products and services that include corporate banking, trade finance, project and structured finance, syndications, treasury products and Islamic banking. It also provides retail banking services through its network of retail banks in Jordan, Egypt, Tunisia and Algeria.