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SICO's net profit surges 166pc to BD5.1 million

July 26, 2014

MANAMA: Securities & Investment Company (SICO), licensed by the Central Bank of Bahrain as a conventional wholesale bank, yesterday announced that net profit for the first half of this year increased by 166 per cent to BD5.1 million, compared with BD1.9m in the corresponding period last year.

Operating income grew by 87pc to BD8.2m from BD4.4m in the same period last year.

Basic earnings per share rose from 4.5 fils to 11.8 fils.

For the second quarter of this year, net profit increased to BD2.5m compared with BD901,000 in the corresponding period last year while operating income rose by 86pc to BD4m from BD2.2m in the same period last year.

Basic earnings per share rose from 2.1 fils for the second quarter last year to 5.8 fils in the second quarter this year.

Interest income, net fee and commission income, and brokerage and other income during the second quarter of this year contributed to operating income by BD327,000, BD1.6m and BD829,000, respectively.

Net investment income contributed BD1.3m. Total operating expenses for the period were BD1.4m.

Year-to-date, brokerage and other income have increased by 129pc to BD1.6m from BD685,000 in the first half of 2013.

Investment income grew by 94pc to BD3.7m from BD1.9m in the first half of last year, and net fee and commission income increased by 108pc to BD2.3m from BD1.1m in the first half of 2013, while interest income declined slightly to BD657,000 from BD702,000 reported for same period last year.

For the first six months of 2014, total operating expenses, which include staff overheads, interest expense and general administration and other expenses, rose moderately to BD2.9m, compared with BD2.4m for the corresponding period in 2013.

As on June 30 this year, total balance sheet footings had decreased slightly to BD93.3m from BD94.2m at the end of 2013.

Assets under management grew by 13.6pc to BD360m ($955m) from BD317m at the end of the previous year, while assets under custody with the bank's wholly-owned subsidiary - SICO Funds Services Company - grew by 31pc from BD1.3 billion to BD1.7bn.

"Our financial results for first half of 2014 reflect the encouraging growth recorded by all of the bank's business lines, and the receipt of new mandates in the areas of discretionary portfolio management, agency brokerage, corporate finance, and custody and administration," SICO chairman Shaikh Abdulla bin Khalifa Al Khalifa said.

"Despite the GCC equities sell-off during June amid worries about speculative bubbles and the overheated property sector in Dubai, net profit for the first six months rose by 166pc to BD5.1m from BD1.9m in the corresponding period last year, which equals the net profit reported for the whole of 2013," SICO chief executive Najla M Al Shirawi said.

"All core business areas generated strong revenues, with fee-based income revenue reaching BD3.9m, which is the highest quarterly fee-based revenue achieved since 2007.

"Total assets under management increased to a record $955m, surpassing the highs recorded before the financial crisis of 2008 by 57pc," she added.

The bank continued to maintain a strong capital base, ending the first six months of the year with increased shareholders' equity of BD62.9m.

The balance sheet remains highly liquid, with a very strong consolidated capital adequacy ratio of 70.55pc.

The available-for-sale securities portfolio at the end of June this year decreased in size to BD31.1m from BD32.7m at the end of 2013.

Similarly, investments at fair value through profit or loss decreased to BD15.9m from BD19.8m at the end of the previous year, as part of the bank's tactical asset allocation.

"We are pleased with the continuation of our strong results, which demonstrates the capability of the SICO team to create value for shareholders and clients by capitalising on opportunities arising from market recovery and higher prospects for the economy," Ms Al Shirawi said.

"We have enjoyed bullish rallies in both equities and fixed income in the first half of the year, however, we do not expect the stock markets' exceptionally strong performance during the first six months of the year to be repeated in the second half of 2014.

"We also expect the positive momentum in fixed income to slow down or stay range bound for the rest of the year, as concerns about the pace of global economic growth that drove investors to safe-haven assets in the first quarter of 2014, subside during the second half of this year.

"Nevertheless, our different business lines give SICO significant room for additional revenues, with a healthy pipeline of mandates and transactions in the areas of asset management, brokerage and corporate finance.

"We have a positive outlook for the rest of the year, barring of course, any unforeseen events.

"At the same time, we continue to remain focused on prudently managing our capital and cost structure," she added.

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Source: Gulf Daily News (Bahrain)

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