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Arab Banking Corporation announces 43% increase in net profit to US$204 million

Mr. Hassan Juma, President & Chief Executive of ABC Mr. Saddek El Kaber, ABC's Chairman

Mr. Hassan Juma,
President & Chief Executive of ABC

Mr. Saddek El Kaber,
ABC's Chairman

Manama, Bahrain: Arab Banking Corporation (ABC) today announced that its consolidated Group net profit for the year ending 2011 was US$204 million, 43% higher than last year.  The surge was achieved despite the challenges from unprecedented adverse political and economic events arising from the Arab spring and Eurozone crisis. Revenues rose US$99 million to US$818 million, whilst operating expenses increased by US$55 million to US$414 million, resulting in cost to income ratio of 51%. Impairment provisions for regional and international exposures, cushioned by recoveries, resulted in the net charge for the year of US$28 million compared to US$77 million for the previous year. Net profit for the fourth quarter was US$47 million.

Strong revenues from Treasury, Trade Finance and Retail business lines in the Arab World boosted the Group’s earnings with significant contribution from its Brazilian subsidiary, demonstrating the benefits of the Group’s product and geographical diversification. The solid performance was achieved whilst ABC continued to derisk and deleverage the balance sheet resulting in comfortable liquidity levels being maintained throughout the year as the Group’s total assets declined 11% to US$25,015 million. Liquid assets to deposits ratio at the year-end was 64%.

Shareholders’ equity at 31 December 2011 stood at US$3,598 million compared to US$3,428 million last year. ABC Group’s capital adequacy ratio at 2011 year-end was very strong at 24.3%, predominantly Tier 1, which totalled 19.2%.

Mr. Hassan Juma, President & Chief Executive of ABC, said, “Proactive and prudent management ensured strong results in an exceptionally challenging year. It is particularly satisfying to see that all ABC units and product segments contributed to the remarkable performance. It is fitting that the international rating agency S&P has removed the negative credit watch and reaffirmed ABC’s investment grade rating (BBB-) with a stable outlook.

Commenting on the results, ABC's Chairman, Mr. Saddek El Kaber stated, “I am pleased that ABC’s core strengths and geographical diversification enabled it to withstand severe external shocks and yet deliver outstanding results. With the ongoing support of the shareholders ABC is very well positioned to boost its drive to build MENA’s leading universal bank.


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