The Bank closed the first quarter with net profit of US$ 8.8 Million, largely on track with the expectations for Q1. The core banking business grew on a year-on-year basis as we gradually emerge out from the impact of the Covid 19 pandemic. However, the capital markets business witnessed subdued activity in the first quarter due to rising profit rate environment as well as volatility in the market caused by the geo-political situation. As the markets stabilize and investors and issuers get used to the new higher rate environment, we expect the capital markets business to pick up with new Sukuk issuances and Syndicated facilities.

Key Performance Highlights 

• Net profit of US$ 8.8 million, 15.6 % lower than same period last year
• Total operating income of US$9.1 million, 22.5% lower than the same period 2021.
• Total operating income and net profit variance from last year is mainly attributable to subdued capital markets activity in the first quarter and one-off higher income in Q1, 2021 from distribution of certain assets
• Balance sheet remains strong with capital adequacy ratio of 40.7%  

Commenting on the results, Mr. Hammad Hassan, Managing Director of Bank ABC Islamic said, “We started the year with the milder Omicron variant and as a result with lesser restrictions, leading to business travel returning to normalcy. This will have positive impact on new-to-bank customer acquisition, an important performance metric for the business. We are largely on track with our expectations for performance in 2022. With the improvement in macroeconomic credit environment and the region benefiting from higher oil price, we remain cautiously optimistic about business performance picking up pace during the coming months”.

Business Performance 

• Net profit for the first quarter was US$8.8 million compared to US$10.4 million reported in the first quarter of last year.
• Total operating income was US$9.1 million compared to US$ 11.7 million for the same period of last year.
• Allowances for credit losses for the period were a write back of US$2 million compared to US$0.7 million reported during the same period last year. The higher write back was mainly due to improvement in macroeconomic environment in a post pandemic world.
• Operating expenses were US$2.1 million compared to US$1.9 million for the same period of last year, with the business returning to normalcy as compared to last year. 

Balance Sheet:

• ABC Islamic Bank’s total assets stood at US$2.285 billion as of March 31, 2022, compared to US$2.332 billion at 2021 year-end. The balance sheet is expected to grow as we go further in the year, with the expected improvement in capital markets business as well as overall client activity.
• Shareholders’ equity at March 31, 2022, stood at US$306 million, compared to US$297 million at 2021 year-end.
• The bank’s capital base remains very strong with a capital adequacy ratio of 40.7%, predominantly Tier 1, which totalled 40%.

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Hammad Hassan

Managing Director of Bank ABC Islami​c​​​​​​​​​​​