ABC Islamic Bank reports US$10.1 million net profit for 2009
Manama, Bahrain: ABC Islamic Bank today announced a net profit of $10.1 million for 2009 compared to $25.6 million for 2008.
Net profit for the fourth quarter was $3.7 million, compared to a nominal third quarter loss of $175,000 as there were no impairment provisions required for the fourth quarter compared to $3 million taken in the third quarter. Income for the fourth quarter was $7.4 million versus $9.2 million for the previous quarter, due to customer repayments, lower participation fees and lower rates. There was also the positive impact of lower rates as profit payable declined to $3.2 million versus $4.6 million in the previous quarter which allowed the net profit margin to stay at $4.2 million, slightly lower than the previous quarter of $4.5 million. Staff and operating costs for the fourth quarter were at $0.6 million versus $1.6 million in the third quarter, mostly because of the reversal of 2009 incentive accruals during the quarter.
For the year, net profit margin income was $20 million compared to $25.9 million for 2008, due largely to lower rates and prudent trimming of balance sheet asset size. Staff and operating costs were unchanged at $5 million compared to 2008. Impairment provisions of $5 million were taken in 2009 against exposure in the GCC compared to $3 million total provisions in 2008.
Shareholders’ equity at the year-end stood at $176.5 million compared with the total of $153 million at 31 December 2008. Capital adequacy ratio, calculated on the basis of Basel II Capital adequacy regime stood at 24.1%, predominantly Tier 1, which totaled 23%, both up year on year.
ABC Islamic Bank’s total assets as at December 2009 stood at $1.32 billion, compared with $1.46 billion at the end of December 2008.
Commenting on the results, Mr. Naveed Khan, Managing Director, said, “ABC Islamic maintained a positive operating result in 2009 despite conservative provisioning to cover exposure in the GCC. However the bank’s capitalization continues to provide a healthy platform for future growth.”