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ABC Islamic Bank announces US$1.4 million half-year profit

Manama, Bahrain: ABC Islamic Bank today announced a net profit of $1.4 million for the first half-year of 2010. Net loss for the second quarter was $0.4 million compared to a profit of $1.8 million in the first quarter, primarily due to impairment provisions.

Total income for the second quarter was $4.1 million, 5.4% above $3.9 million generated in the first quarter. Operating expenses increased marginally to $1.6 million compared to    $1.4 million in the previous quarter. Operating profit before impairment provisions registered a 2.3% increase to reach $2.5 million. An impairment provision of $2.9 million was taken during the quarter, $2.2 million higher than the previous quarter.

Shareholders’ equity at 30 June 2010 stood at $171.5 million, compared to $176.5 million at year-end 2009, the decrease being mainly due to the fall in the fair values of available-for-sale investments. The bank’s capital base remains very strong with a capital adequacy ratio of 21.6%, predominantly Tier 1, which totaled 21.5%.

ABC Islamic Bank’s total assets marginally declined to $1.29 billion at 30 June 2010 from $1.32 billion at year-end 2009 mainly due to a decline in available-for-sale investments and Ijara assets.

Commenting on the results, Mr. Naveed Khan, Managing Director, said, “ABC Islamic Bank was able to maintain a positive operating result in the first half of 2010 despite de-risking of the balance sheet and provisioning on impaired assets. The operating performance of the bank continues to show improvement from the previous quarter despite the higher provisioning required for an old collateral-linked exposure, currently in dispute, which we are fairly confident will be reversed eventually.”


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