Manama, Bahrain: Arab Banking Corporation today announced that its consolidated Group net profit for the first half-year of 2010 was US$75 million, 39% higher than last year. Net profit for the second quarter was $34 million compared to $41 million in the first quarter, primarily due to impairment provisions taken for regional as well as global exposures.
Total operating income for the second quarter amounted to US$177 million, 4% above US$170 million in the first quarter, driven by strong growth from our Brazilian subsidiary, Treasury and Retail operations. Group operating expenses increased marginally to US$90 million compared to US$88 million in the previous quarter, however the cost/income ratio improved to 51% from 52%. Operating profit before impairment provisions registered a 6% increase to reach US$87 million. Impairment provision of US$22 million was taken during the quarter, US$10 million higher than last quarter which had included some exceptional recoveries.
Shareholders’ equity at 30 June 2010 stood at US$3,311 million, compared to US$3,243 million at the end of the first quarter, the increase during the quarter coming from improvement in fair values of non-trading securities and net profit for the period. ABC’s capital base remains very strong with a capital adequacy ratio of 23.9%, predominantly Tier 1, which totalled 19.2%. ABC’s liquidity remains comfortable with the liquid assets to deposits ratio at 76%, compared with 74% at the end of the previous quarter.
Mr. Hassan Juma, President & Chief Executive of ABC, said, “I am pleased that ABC continues to show strong results, benefiting from the Group’s well-diversified business lines across various geographies demonstrating stability in its earnings stream despite the challenging economic environment faced regionally as well as in the US and Europe.”