News Column

ABC net profit surges 22pc to $137 million

August 12, 2014

MANAMA: Bahrain-based Arab Banking Corporation (ABC) has reported a 22 per cent increase in consolidated net profit at $137 million for the first half of this year, compared with $112m for the same period last year.

Net profit for the second quarter was $66m, 18pc higher than $56m reported for the same quarter last year. Total operating income for the second quarter amounted to $242m on the back of growth in business volumes across all its geographies.

This was 15pc higher than the $210m achieved during the same period last year.

Operating expenses decreased 2pc to $113m compared with last year which had included one-off restructuring costs.

Cost to income ratio improved to 46.7pc from 54.8pc mainly from revenue growth.

Net impairment provisions for the second quarter of $19m were higher than $10m in the same period last year.

However, net charge for the half-year at $27m was lower than $38m for the same period last year.

ABC Group's total assets registered a growth of 6pc to $28.1 billion as of June 30, reflecting growth in loan volumes and liquid assets.

The ratio of non-performing loans to gross loans declined to 2.5pc from 3pc at last year-end.

The group has maintained a diverse and primarily short-term asset book with 56pc of assets having a tenor of less than one year.

Deposits grew 8pc in the first half of the year to $19.7bn from $18.3bn at last year-end.

The liquidity position continues to be strong with liquid assets to deposits ratio at 59pc (63pc at last year-end).

Liquid assets ratio stood at 42pc (44pc at last year-end).

Shareholders' equity as of June 30 stood at $3,980m, compared with $3,897m at the end of the first quarter and $3,940m at last year-end.

ABC's capital base remains strong, with a capital adequacy ratio of 20.7pc, predominantly Tier 1, which totalled 17.3pc.

Adjusted to Basel III basis, in line with the Central Bank of Bahrain's draft rules, the group's total capital adequacy ratio is 20.3pc, and its Tier 1 ratio is 17.4pc.

"The half-year results show year-on-year profit growth for the sixth consecutive year," ABC chairman Saddek El Kaber said.

"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," he added.

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Source: Gulf Daily News (Bahrain)

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