Manama, Bahrain: Arab Banking Corporation today announced that its consolidated Group net profit for the first quarter of 2010 was US$41 million, 25% higher than the first quarter of last year.
Total revenues amounted to US$170 million, well above the US$139 million generated in the first quarter of last year. Increased income was achieved from loans, documentary credits as well as treasury activities across ABC Group despite reduced asset volumes from derisking initiatives in the wholesale banking segment. Operating expenses totalled US$88 million, compared to US$79 million for the same period last year with Cost/Income ratio declining to 52% from 57% last year. Net impairment provisions totalled US$12 million, compared to US$15 million last year.
The US$1.11 billion Rights Share Issue completed during the quarter boosted shareholders’ equity which stood at US$3,243 million as of 31 March 2010. With the enhanced capital base, ABC group’s capital adequacy ratio strengthened further to 21.8%, predominantly Tier 1, which totalled 18.8%. ABC’s liquidity remains comfortable with liquid assets to deposits ratio at 74%, compared with 71% at the 2009 year end.
ABC’s continued efforts to derisk resulted in total assets declining to $25.5 billion at the end of the first quarter compared to $26.0 billion at year-end 2009 mainly from decline in securities portfolio.
Mr. Hassan Juma, President & Chief Executive of ABC, said, “With the fifth straight quarter of strongly positive results after weathering the difficult events of 2008, we are now firmly on the path of steadily increasing profitability. The results reflect the growing impact of the strategic initiatives launched to boost core earnings as well as the capital base to set us well on the path to becoming a leading Universal Bank in MENA.”