The performance for the quarter compared to the previous year was affected by some deterioration in economic conditions and a stronger US dollar against domestic currencies, a trend which intensified since the second half of 2015. However, the core franchise for the group continued to show sustained performance in local currency terms with our renewed strategy having a positive impact in most of our business units. Compared to Q1 of 2015, the Brazilian Real and Algerian Dinar were weaker in Q1 2016 by over 25% and 13% respectively. 

After absorbing the impact of these factors, total operating income for the quarter was US$209 million, compared with US$168 million reported in the first quarter last year, the increase to a large extent is attributable to currency movements. Operating expenses at US$104 million remained at the same level as last year, with some reduction benefiting from currency translation. Net impairment provisions for the quarter at US$18 million, were higher than the previous year’s US$9 million. Whilst the previous year had benefited from certain write-backs, the provision charge for the current quarter was in line with our expectations and past experience. The ratio of non-performing loans to gross loans remained healthy at 3.5%, compared to 3.4% at 2015 year-end. Tax charge for the year was at US$35 million, whilst last year it was a positive US$12 million arising from the tax treatment of currency movements in subsidiaries.

The Bank ABC Group’s total assets stood at US$29.2 billion at the end of first quarter of 2016, compared to US$28.2 billion at the 2015 year-end, showing restrained growth mainly from currency translation and the focus on maintaining additional liquidity, as the Bank prioritises asset quality and return. 

Deposits in turn increased by US$0.5 billion during the quarter to reach US$18.9 billion, again due to currency translation and growth in underlying deposits. The Group’s liquidity position continues to be at comfortable levels with the liquid assets to deposits ratio at 67%, similar to the 66% at the year-end 2015.

Shareholders’ equity at 31 March 2016 stood at US$3,775 million after absorbing the foreign exchange movements on investments in subsidiaries and fair value changes on marketable securities. The Bank ABC Group’s consolidated total capital adequacy ratio (CAR) remained strong at 18.7%, comprising predominantly Tier 1 at 16.7%.

Bank ABC's Group Chairman, Mr. Saddek Omar El Kaber, commented that “After facing challenges last year arising from emerging market currency depreciation and volatility and geopolitical issues in our key markets, we are encouraged to see the results of the first quarter in line with our expected targets. Whilst the economic conditions in the region are weakening, our core businesses continue to perform well, helped by robust risk management and proactive business strategy. We continue to progress steadily with our strategic initiatives to improve performance and organisational health, as we simultaneously steer the Bank through turbulent times.”​