News Column

SICO net profit surges 76pc to $13.5 million

February 24, 2014

MANAMA: Bahrain-based Securities and Investment Company (SICO) yesterday reported a consolidated net profit of BD5.1 million ($13.5m) for last year compared with BD2.9m registered in 2012 - an increase of 76 per cent.

Operating income grew by 41pc to BD10.6m from BD7.5m in the previous year. Basic earnings per share rose by 86pc to 11.9 fils from 6.71 fils in 2012.

Total operating income for the final quarter of 2013 increased to BD3.5m compared to BD2.2m for the corresponding 2012 period, while total expenses for the fourth quarter rose to BD1.7m from BD1m in the same period of 2012.

The net consolidated profit for the fourth quarter of last year was BD1.8m, compared with BD1.2m for the same period of the previous year.

Brokerage and other income for the full year increased to BD1.2m from BD671,000 in 2012, along with net investment income which grew to BD4m from BD3.3m in 2012.

Net fee and commission income was also augmented to BD4m from BD2.2m, while net interest income remained largely unchanged from last year at BD1.3m.

Total operating expenses, which include staff overheads, general administration and other expenses, were BD5.3m, compared with BD4.4m in 2012.

At the end of last year, total balance sheet footings had increased by 20pc to BD94.2m from BD78.4m at the end of the previous year.

Assets under management grew by 39pc to BD317m from BD228m at the end of 2012, while assets under custody with the bank's wholly-owned subsidiary - SICO Funds Services Company - grew by 53pc to BD1.26 billion from BD824m at the end of 2012.

SICO continued to maintain a strong capital base, ending the year with shareholders' equity of BD61.9m, with a strong consolidated capital adequacy ratio of 62.3pc. As a reflection of its traditionally prudent philosophy, the bank remains highly liquid with currently 35pc, or BD32.8m, of its balance sheet in cash and deposits, compared with 41.5pc, or BD32.5m, at the end of 2012. Available-for-sale securities at the end of last year increased to BD32.7m from BD21.8m at the end of 2012, while investments at fair value through profit or loss rose to BD19.8m compared to BD16.1m in 2012.

SICO chairman Shaikh Abdulla bin Khalifa Al Khalifa hailed the excellent financial performance.

"Highlights include substantial increases in net profit and operating income with, significantly, all business lines contributing positively to the bottom line.

"In particular, brokerage and other income increased by 86pc, net investment income grew by 22pc and assets under management rose by 39pc.

"In addition, SICO was awarded important new mandates in the areas of discretionary portfolio management, agency brokerage, corporate finance and custody and administration.

"It is particularly encouraging that fee and commission-based income now accounts for 50pc of total income, achieving the optimum 50:50 balance between proprietary income and fee-based revenue.

"With a balanced and diversified revenue model, the institution is better positioned to accommodate market volatility.

"Looking ahead to 2014, we are optimistic on the new opportunities for SICO's continued growth. The bank is well-positioned to take advantage of the considerable interest by GCC institutional investors in the Gulf region, and the likelihood of increased foreign investment inflows to the GCC region," Shaikh Abdulla said.

Chief executive Anthony Mallis said in many ways, 2013 was a transformational year for SICO, with the best financial results since 2007, showing the bank not only benefited from a more temperate regional and international capital markets environment, but also restoring its earnings potential as a result of strategic, business and operational initiatives undertaken during the past years that have set the basis for future growth.

"In no small way a great team has helped in generating these pleasing results.

"On a personal note, my decision to retire in March marks the end of one chapter in SICO's development and the beginning of another, with the bank now in excellent shape."

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Source: Gulf Daily News (Bahrain)

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