Manama, Bahrain: Arab Banking Corporation today announced the Group’s net profit for the first quarter of 2007 of US$70 million. This was an increase of 6% over the net profit of US$66 million for the same period last year.
Total income reached US$138 million (2006: US$133 million). Interest income at US$65 million was 10% higher than the US$59 million for the same period last year as a result of increased loan and securities volumes. Non interest income totalled US$73 million (2006: US$74 million, which included US$8 million from the disposal of certain fixed assets). Loan loss recoveries net of impairment provisions totalled US$6 million (2006: net impairment provisions of US$1 million).
Operating expenses increased to US$63 million (2006: US$57 million) attributable to additional staff hired to develop the Group’s growing business lines, cost of living increases, and additional costs linked to variable compensation schemes arising from higher earnings.
ABC Group’s total assets amounted to US$23.2 billion (2006 year end: US$22.4 billion). Investment in securities increased to US$9.2 billion (2006: US$8.6 billion) mainly in highly liquid investment grade securities. Loans and advances increased to US$8.8 billion (2006: US$8.6 billion) as the lending portfolio continued to grow to meet customer demand. Liquidity remains strong, with the liquid assets to deposits ratio at 74% (2006: 74%). Loans to deposits ratio decreased marginally to 48% (2006: 49%). The Group continues to maintain a strong capital base as evidenced by the risk asset ratio of 15.6% at March 2007 (2006: 17.0%).
Mr. Ghazi M. Abdul-Jawad, President & Chief Executive said, “ABC's has been able to continually improve its operating results over the past three years, clearly demonstrating the benefits that have come from our renewed focus on the Arab region and its trade flows. The growing income streams from our wholesale banking strengths in treasury, trade and project finance, and Islamic financial services complement the expansion of business activities in the region, whilst the development of retail banking activities in our niche markets continues to improve our earnings capabilities. ABC’s standing on the international financial markets continues to improve, as demonstrated by Fitch Ratings’ upgrade in February 2007 of ABC’s rating to BBB+.”
About Arab Banking Corporation
The ABC Group is a leading bank in the Middle East and North Africa and operates as an offshore commercial bank. ABC provides a full range of retail and commercial banking, corporate finance, discretionary fund management, foreign exchange, derivatives, Islamic banking and financial advisory services in the markets in which it offers those services.
ABC's strategy of diversified growth led to the development of its widespread network of branches, representative offices, subsidiaries and affiliates in Arab world countries and international financial centres, including London, Paris, Milan, Frankfurt, New York, Singapore, Tripoli, Tunis, Algiers, Egypt, Bahrain, Beirut, Abu Dhabi, Tehran, Amman and Baghdad.