Bahrain: Bank ABC Islamic has announced its financial results
for the year ending 31 December 2020.
2020 was a year
like no other. Bank ABC Islamic started the year with an optimistic outlook
following its exceptional performance in 2019, achieving double digit growth in
both total operating income as well as net profit. Before the end of first
quarter 2020, the Covid 19 pandemic broke out, triggering unprecedented
challenges that required us to swiftly adapt to the new environment.
The Bank remained
resilient during the year and responded well to the pandemic across all fronts.
Our operational resilience helped in keeping our staff safe at office and providing
secure and seamless access to those working from home, as we continued to serve
our clients without comprising on our service standards. The pandemic, combined
with low profit rate environment and depressed oil price, resulted in overall
slowdown of business momentum. On top of this, a regional fraud case resulted
in significantly higher loan provisions as compared to the previous year.
challenges were unable to over shadow the resilience of our business, and we
achieved total operating income of $44.9 million in 2020 compared to $46.7 million
in 2019. Our core customer business and
balance sheet showed a strong 11.3% growth on a year on year basis. Moreover,
our financial health remained solid, with a capital adequacy ratio of 34.7% as
compared to regulatory requirement of 12.5%.
Our activity in
the market remined unabated; we successfully led nine Sukuk mandates and three
milestone during the year was receiving regulatory approvals and laying down
the ground work to set up an Islamic banking widow in Algeria, called
‘alburaq’. The first ‘alburaq’ branch has recently started its operations in
of Bank ABC Islamic have been recognized by our external rating agency, IIRA
(Islamic International Rating Agency), who reaffirmed our 2019 rating of A-/A-2
on the International scale and A=(bh)/A-1(bh) on the National scale with a
A more detailed
summary of the 2020 Financial Results follows below:
Q4 Financial Results (three-month period)
profit for the fourth quarter was US$6.3 million compared to US$8.5 million reported
in the fourth quarter of 2019.
operating income was US$9.7 million compared to US$12.1 million reported for
the same period last year.
expenses were US$1.4 million, compared to US$2.8 million for the same period of
for credit losses were US$1.9 million compared to US$0.7 million reported in
FY 2020 Financial
profit for the year 2020 was US$28.6 million compared to US$37.3 million recorded
for the previous year, 23.4% lower than previous year, mainly on account of
higher loan provisioning.
operating income was US$44.9 million compared to US$46.7 million reported for
last year, only 3.7% lower than previous year.
expenses were US$6.4 million compared to US$8.5 million for last year.
for credit losses for the year were US$9.5 million compared to US$0.5
million reported during last year. The exceptional increase in ECL during the
year was primarily on account of a fraud case in GCC.
Islamic Bank’s total assets stood at US$2.314 billion at the end of 2020,
compared to US$2.079 billion at the 2019 year-end, showing a growth of 11.3% on
year on year basis.
equity at 31 December 2020 stood at US$293 million, compared to US$365 million
at 2019 year-end. The decrease is mainly due to the US$100 million dividend
payment to the shareholders made during the year.
Bank’s capital base remains very strong with a capital adequacy ratio of 34.7%,
predominantly Tier 1, which totalled 33.7%.
Commenting on the
results, Mr. Hammad Hassan, Managing Director of Bank ABC Islamic, said, “In
the backdrop of the pandemic, and a very difficult operating environment, realising
$44.9 million in total operating income compared to $46.7 million in 2019, and
balance sheet growth of 11.3% is a major achievement and is a testament to the hard
work of and exemplary performance of our staff. Net profitability of the Bank
was adversely impacted due to a regional fraud case that led us to take a large
provision. During the year, in line with CBB’s directives, we supported our
clients who needed forbearance during these tough times. We remain committed to
building our customer franchise and look at 2021 with optimism and hope for
business environment to return to normalcy during later part of the year.”