Manama, Bahrain: Arab Banking Corporation (ABC) today announced that its consolidated Group net profit for the year ending 2013 was US$239 million, a 17% increase when compared to US$205 million for 2012.
The Board of Directors, during the meeting held on 17 February 2014 in Bahrain, resolved to recommend a cash dividend distribution of 5% of the issued share capital (US$0.05 per share), amounting to US$155,500,000, for approval by the shareholders at the Annual General Meeting to be held on 23 March 2014 in Bahrain.
ABC’s total operating income rose to US$857 million from US$816 million in the previous year despite the adverse impact from the stronger dollar on consolidation of revenues from subsidiaries. Year-on-year revenue growth was recorded by product segments across all geographies. Operating expenses increased by US$37 million to US$440 million, mainly due to one-off restructuring costs during the first half of the year. This resulted in a small, temporary increase in the cost to income ratio of 51.3% compared to 49.4% in 2012. Operating profit before impairment provisions reached US$417 million (2012: US$413 million). Net impairment provision charge of US$49 million was US$13 million lower than in the previous year due to recoveries and write-backs. After tax charge and share of minority interests, net profit for the year amounted to US$239 million. Net profit for the fourth quarter was US$61 million compared to US$47 million in the previous year.
Total assets grew by US$2 billion to reach US$26.5 billion. The increase was largely in marketable securities and other short term, liquid assets. Loans and advances also rose by US$0.8 billion to US$13.7 billion. Robust risk management ensured that the ratio of NPLs (non-performing loans) to gross loans declined to 3.0% from 3.2% in 2012.
Deposits continued to grow during the year from US$17.2 billion at 2012 year-end to US$ 18.3 billion. Term financing increased by the second US$1 billion drawn in July 2013 from the US$2 billion 5-year medium term facility arranged in 2012 to enhance the funding and liquidity position. Liquidity continues to be at comfortable levels with the liquid assets to deposits ratio at 63%.
Shareholders’ equity at 31 December 2013 stood at US$3,940 million compared to US$3,778 million at 31 December 2012. ABC Group’s capital adequacy ratio at 2013 year-end was very strong at 22.3%, predominantly Tier 1, which stood at 17.9%.
ABC's Chairman, Mr. Saddek El Kaber, commented, “I am delighted at the results which show a very healthy increase in profits for the fifth consecutive year demonstrating the strength of ABC Group and its ability to overcome the impact of turbulent events in the core markets it serves. I have every confidence that, with the continued support of shareholders and clients, ABC will grow and transform itself into a leading universal bank in MENA.”
ABC is a leading player in the region’s banking industry and provides innovative wholesale financial products and services that include corporate banking, trade finance, project and structured finance, syndications, treasury products and Islamic banking. It also provides retail banking services through its network of retail banks in Jordan, Egypt, Tunisia and Algeria.