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Bank ABC Islamic announces nine-months 2020 net profit of US$22.3 million
14/11/2020
Manama, Bahrain: Bank ABC Islamic – today announces its financial results for the nine months ending 30 September 2020.

Covid 19 continues to impact most of our clients across different geographies. The pandemic combined with low profit rate environment and depressed oil price resulted in an overall slowdown of business momentum, particularly in the corporate sector. However, we remained active in the institutional and sovereign space during the year and successfully led 8 Sukuk mandates and 2 Syndications. 

The Bank’s top line performance has been satisfactory with 2% growth on a year-on-year basis in total operating income. Net profit for the period was lower at US$22.3 million as compared to US$28.9 million during same period last year mainly on account of higher ECL (Expected Credit Losses). The increase in ECL during this period was a combination of a specific provision related to a client fraud in UAE combined with forward looking FAS 30 ECL charge. In making estimates for the latter, the Group and Bank have stress tested the macroeconomic factors conservatively in our ECL model.

Business Performance (three-month period):  

  • Net profit for the third quarter was US$7.9 million compared US$9.9 million reported in the third quarter of last year.
  • Total operating income was US$11.9 million compared to US$12.3 million for the same period of last year.
  • Operating expenses were US$1.4 million, compared to US$1.8 million for the same period of last year.
  • Impairment charges for the period were US$2.5 million compared to US$0.5 million reported during last year. 

Business Performance (nine-month period): 

  • Net profit for the first nine months was US$22.3 million compared to US$28.9 million reported in the first nine months of last year.
  • Total operating income rose to US$35.3 million, 2% higher compared to last year of US$34.6 million.
  • Operating expenses were US$5 million compared to US$5.6 million for the same period of last year.
  • Impairment charges for the period were US$7.6 million compared with a write back of US$0.2 million reported during last year. 

Balance Sheet: 

  • ABC Islamic Bank’s total assets stood at US$2.152 billion as of September 30, 2020 compared to US$2.079 billion at 2019 year-end.
  • Shareholders’ equity at 30 September 2020 stood at US$287 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 period.
  • The Bank’s capital base remains very strong with a capital adequacy ratio of 33.5%, predominantly Tier 1, which totalled 32.5%. 

Commenting on the results, Mr. Hammad Hassan, Managing Director of Bank ABC Islamic, said, “We are pleased with our performance against the backdrop of the Pandemic and market uncertainties that we are facing. We witnessed some recovery this third quarter which we capitalized upon.

We will continue our focus on asset quality and reducing cost to face the lasting impact of these extreme market conditions.”


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Hammad Hassan
Managing Director of Bank ABC Islamic​

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