Aug. 13--MANAMA -- Arab Banking Corporation (ABC) Tuesday announced that its consolidated group net profit for the first half of 2014 was $ 137 million, a 22 percent increase compared to $112 million for the same period last year. Net profit for the second quarter was $ 66 million, 18 percent higher than $56 million reported last year.
The bank stated that total operating income for the second quarter amounted to $242 million on the back of growth in business volumes across all its geographies. This was 15 percent higher than the $210 million achieved during the same period last year. Operating expenses decreased 2 percent to $113 million compared to last year, which included one-off restructuring costs.
Cost to income ratio improved to 46.7 percent from 54.8 percent mainly from revenue growth. Net impairment provisions for the second quarter of $ 19 million was higher than $10 million in the same period last year, however, net charge for the half-year at $27 million was lower than $ 38 million for the same period last year.
ABC Group's total assets registered a growth of 6 percent in 2014 to stand at $28.1 billion as of June 30, reflecting growth in loan volumes and liquid assets.
The ratio of NPLs (non-performing loans) to gross loans declined to 2.5 percent from 3 percent at 2013 year-end. The group has maintained a diverse and primarily short-term asset book with 56 percent of assets having a tenor of less than 1 year.
Deposits grew 8 percent in the first half of the year to $19.7 billion from $18.3 billion at 2013 year-end. The group's liquidity position continues to be strong with liquid assets to deposits ratio at 59 percent (63 percent at 2013 year-end). Liquid assets ratio stood at 42 percent (44 percent at 2013 year-end).
Shareholders' equity at June 30 June stood at $3.98 billion, compared to $3.90 billion at the end of the first quarter and $3.94 billion at 2013 year-end. ABC's capital base remains very strong, with a capital adequacy ratio of 20.7 percent, predominantly Tier 1, which totaled 17.3 percent. Adjusted to Basel III basis, in line with the Central Bank of Bahrain's draft rules, the group's total capital adequacy ratio is 20.3 percent, and its Tier 1 ratio is 17.4 percent.
ABC's Chairman Saddek El Kaber commented: "I am happy to see the excellent half-year results, which show year-on-year profit growth for the sixth consecutive year. During the first half of the year, we have also strengthened our management team with the addition of a new group chief banking officer, group chief financial officer and group head of compliance, all with significant international banking experience. I am confident that with our reinforced top management team in place, and with substantial capital resources and comfortable liquidity, ABC will be able to continue on its growth path with robust risk management to deliver sustained returns for our shareholders."
ABC, a major international bank in the MENA region, 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 the region.
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