Manama, Bahrain: Bank ABC Islamic today announces its results for the nine months ending 30 September 2021:
Key Highlights of first nine months Performance
- After the one-off impact of fraud related impairments in 2020, the Bank has rebounded with significant improvement in net profitability, 19.4% higher than the same period last year.
- The asset quality remained strong with no significant account specific impairments.
- The Bank continues to support the Group in Islamic Banking initiatives with a strong start of Islamic banking in Algeria this year, under the brand name, ‘alburaq’ that caters to corporate, SME and retail segments.
Business Performance (three-month period):
- Net profit for the third quarter was US$7.5 million compared to US$7.9 million reported in the third quarter of last year.
- Total operating income was US$9.7 million compared to US$11.9 million for the same period of last year.
- Allowances for credit losses for the period were US$0.4 million compared to US$2.5 million reported during the same period last year.
- Operating expenses were US$1.8 million, compared to US$1.4 million for the same period of last year.
Business Performance (nine-month period):
- Net profit of US$ 26.7 million, 19.4% higher than same period last year, reflects the Bank’s return to normal performance after the one-off exceptional impairment in 2020.
- Total operating income of US$31.2 million, 11.5% lower than the same period last year, is mainly on account of, (a) consistently lower profit rate environment during 2021; and (b) lower fee income in 2021 due to subdued markets activity impacting our capital markets businesses. Otherwise, the core wholesale banking business performance was almost 95% of the year’s target.
- Total operating expenses slightly higher, 2.6% than last year’s level of US$ 5 million, mainly related to staff costs, as the pandemic related subsidies provided by the government in 2020 were discontinued in 2021.
- Total assets stood at US$1.701 billion as of September 30, 2021 compared to US$2.314 billion at 2020 year-end. The drop in assets is mainly attributable to excess liquidity in the market and subdued new business activity due to the pandemic. Both factors contributed in lower asset utilization by clients and large repayments in some cases.
- Shareholders’ equity at September 30, 2021 stood at US$294 million, compared to US$293 million at 2020 year-end.
- Capital adequacy ratio remains very strong at 43.2%, predominantly Tier 1, which totalled 42.2%.
Commenting on the results, Mr. Hammad Hassan, Managing Director of Bank ABC Islamic said, “We are pleased on the overall performance of the Bank in the nine month period, despite the impact on top line due to a combination of factors including lower profit rate environment, reduced capital markets activity and lower asset utilizations. However, with the rebound in most businesses as the impact of the pandemic reduces, we are optimistic on recovery of core business lines and expect to close the year on strong footing.”