Manama, Bahrain: ABC Islamic Bank today announced a net profit of $1.6 million for the nine months ending 30th September 2010. Net profit for the third quarter was $0.2 million compared to a loss of $0.4 million in the second quarter.

Total operating income for the third quarter remained at the same level as the second quarter of $4.1 million. Operating expenses of $1.5 million were slightly lower than the previous quarter of $1.6 million. Operating profit before impairment provisions improved 5% to reach $2.6 million. Impairment provision in the third quarter was $2.4 million, compared to $2.9 million in the previous quarter.

Shareholders’ equity at 30 September 2010 stood at $181 million, compared to
$171.5 million at the half year, the increase of $9.5 million coming from improvement in fair values of available-for-sale investments and net profit for the period. The bank’s capital base remains very strong with a capital adequacy ratio of 23.3%, predominantly Tier 1, which totaled 23.1%.

ABC Islamic Bank’s total assets declined to $1.24 billion as at 30th September 2010 from $1.29 billion at 30th June 2010 mainly due to a decline in Murabaha receivables and Ijara assets.

Commenting on the results, Mr. Naveed Khan, Managing Director, said, “Despite a further de-risking of the balance sheet ABC Islamic Bank reported an improvement in its operating profitability. This is in line with the strong operating results reported by the parent Group for the same period. The operating performance of the bank continues to show improvement from the previous quarter despite higher provisioning required for an old collateral linked exposure. The capital base of the bank also remains strong with a Capital Adequacy Ratio greater than 23%.”