News Column

ABC profit surges 27pc

April 29, 2014

MANAMA: Arab Banking Corporation (ABC) yesterday reported a 27 per cent increase in consolidated net profit for the first quarter at $71 million, compared with $56m registered in the first quarter of last year.

Business volumes grew in line with expansion plans, resulting in improved revenues across all the geographies that ABC operates in.

However, currency translation from the stronger dollar resulted in a 2pc decline in operating income for the quarter to $226m compared with the first quarter of last year.

Operating expenses at $103m decreased by $10m resulting in cost to income ratio of 46pc, a decline of 3pc, benefiting from the restructuring initiatives taken last year, besides the impact of currency translation.

Recoveries and continued vigilance over asset quality resulted in net impairment provisions of $8m, lower than the previous year's $28m which was impacted by some exceptional provisions.

ABC Group's total assets stood at $27.9 billion at the end of the first quarter compared with $26.5bn at last year-end, reflecting growth in loan volumes and other short-term liquid assets.

The ratio of non-performing loans to gross loans declined to 2.7pc from 3pc at last year-end.

Deposits increased by $1.2bn during the quarter to $19.5bn.

Liquidity continues to be at comfortable levels with liquid assets to deposits ratio at 62pc.

Shareholders' equity at March 31 stood at $3,897m following the distribution of 5pc dividend to the shareholders.

ABC Group's capital adequacy ratio at 21.3pc was above the regulatory minimum (12pc) and comprised predominantly tier 1, which totalled 17.7pc.

"I am pleased with the excellent start to the year following the steadily growing results of the last five years," ABC chairman Saddek El Kaber said.

"With continued emphasis on planned expansion I am confident that ABC Group will continue to flourish despite the challenging environments that some of the ABC units operate in."

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Source: Gulf Daily News (Bahrain)

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