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ABC Islamic Bank reports US$2.1 million net profit for 2010
Manama, Bahrain: ABC Islamic Bank today announced a net profit of US$2.1 million for 2010 compared to US$10.1 million for 2009. Total operating income was US$15.9 million compared to US$20.4 million for 2009, due to lower rates and de-risking of balance sheet asset size. Staff and operating costs of US$4.9 million were also lower than the previous year of US$5.0 million. Impairment provisions of US$8.6 million were taken for regional exposures during the year, US$3.6 million higher than the previous year.
Net profit for the fourth quarter was US$0.5 million, compared to US$0.2 in the third quarter. Total operating income was US$3.8 million compared to US$4.1 million for the previous quarter. Staff and operating costs for the fourth quarter were at US$0.5 million compared to US$1.5 million in the third quarter. Additional impairment provision of US$2.7 million was taken during the quarter.
Shareholders’ equity at the year-end stood at US$187.3 million compared to US$176.5 million for the previous year, an increase of US$10.8 million coming from improvement in fair values of available-for-sale investments and net profit for the year. The capital adequacy ratio at 2010 year-end was very strong at 24.5%, predominantly Tier 1, which totaled 24.2%, both up year on year.
ABC Islamic Bank’s total assets declined to US$1.21 billion as of 31st December 2010 from US$1.32 billion at 31st December 2009 mainly due to decline in available-for-sale investments, murabaha receivables and ijarah assets as a result of further de-risking of the balance sheet.
Commenting on the results, Mr. Naveed Khan, Managing Director of ABC Islamic Bank, said, “During 2010 Arab Banking Corporation’s Bahrain-based Islamic banking subsidiary, has built new relationships with target customers across the MENA region, as well as raising its quality of service to differentiate it from other Islamic banks. Having one of the broadest product ranges of any Islamic institution, the bank is providing selected Target Market customers with high-quality relationship banking incorporating more than one product.
“During 2010, the bank has also led several new financings for customers. Notably, it was the sole arranger of a Japanese bank’s international syndicated facility, which demonstrated how Islamic finance can give conventional borrowers access to a diversified source of finance.
“During the coming year, ABC Islamic Bank expects to grow its lending activity selectively, as a result of both its recent drive to win new clients, and a gradual recovery in the borrowing appetite of customers. The bank will also work closely with ABC Group’s expanding regional retail business, designing and producing Islamic products for the retail market.”


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